India and the Association of Southeast Asian Nations (ASEAN) can together emerge as a dominant manufacturing centre in the Indo-Pacific economy by converting investment competition into a coordinated production strategy, according to an analysis citing research by the Economic Research Institute for ASEAN and East Asia (ERIA). The article, published on 30 October 2026, argues that the widely discussed China+1 diversification strategy needs to evolve into a unified India–ASEAN production framework if the two sides are to offer multinational companies a credible, scaled alternative to Chinese manufacturing.

The Case for a Shared Production Strategy

The ERIA study found that ASEAN already maintains relatively strong connections to global production networks, while India's integration into global value chains still has significant room for improvement. Rather than treating this gap as a weakness, the analysis frames it as an opportunity: the two sides hold complementary strengths that, if combined, would be far more competitive than either can achieve alone.

India brings a large domestic market, technological capabilities, and a broad industrial and labour base. ASEAN, meanwhile, offers dense supplier networks, well-developed ports, established industrial zones, deep export experience, and direct access to East Asian and Pacific markets. Operating independently, the article warns, risks duplication of investment and head-to-head competition in identical product categories — a lose-lose outcome for both sides.

How a Joint Supply Chain Would Work

From the lens of regional production network theory, the economic benefits are highest when companies can combine location-specific advantages across borders. Under a joint model, components could be manufactured in one country, processed in another, assembled at the most cost-efficient site, and distributed through shared regional trade corridors. This architecture, the article notes, is the fundamental difference between merely attracting foreign capital and building collective, durable competitiveness.

To realise this, both sides would need to develop a cross-regional supply chain map identifying priority industries, missing suppliers, technological requirements, and the most competitive production stages in each country. Priority sectors identified include electronics, semiconductors, electric vehicle (EV) batteries, pharmaceuticals, and industrial machinery. The existing trade agreement between India and ASEAN should, according to the analysis, be redirected toward facilitating trade in intermediate goods and components rather than finished products alone.

What Each Side Must Do

India needs to strengthen manufacturing competitiveness through improved regulatory certainty, expanded technology partnerships, and leveraging its domestic market to achieve production scale. The country is positioned, the article argues, to serve as a hub for design, engineering, industrial software, and selected high-value component manufacturing.

ASEAN member states each bring distinct sectoral strengths to the table. Indonesia can contribute through critical minerals, battery materials, and downstream industrial development. Malaysia is well placed to deepen semiconductor and electronics capabilities. Thailand can anchor automotive manufacturing, while Vietnam can extend its already strong electronics manufacturing and export network. The bloc as a whole needs to harmonise standards and build tighter connectivity between its industrial zones and Indian supplier networks.

Investment Cooperation Beyond Individual Promotion

The analysis stresses that investment cooperation must move beyond each country's individual promotion efforts. A coordinated approach — with joint industrial corridors, shared logistics infrastructure, and harmonised regulatory frameworks — would make the India–ASEAN combine genuinely attractive to multinationals seeking supply-chain resilience post-pandemic and amid ongoing US-China trade tensions. This comes amid a broader global shift in which companies are actively restructuring supply chains away from single-country dependency, and India and ASEAN are among the most frequently cited beneficiaries of that reorientation.

Whether both sides can translate strategic complementarity into institutional coordination remains the central question — one that policymakers on both sides will need to answer with concrete frameworks, not just policy intent.