Coronavirus: India among top choices for relocation of production from China

The 2020 Agility Emerging Markets Logistics Index predicts India and Vietnam to be top choices for the relocation of production or sourcing from China, if it were to move, amidst the looming threat that the coronavirus is posing to the global economy.

In the wake of the global outbreak of the novel coronavirus, supply chain industry executives also fear a recession in 2020 amid rising concerns about downward pressure on global trade volumes, uncertain growth prospects, and ongoing friction between the U.S. and China. They identified rising trade barriers as the factor most likely to hurt emerging market growth.

The survey is part of the 2020 Agility Emerging Markets Logistics Index, the company’s 11th annual snapshot of industry sentiment and ranking of the world’s 50 leading emerging markets. The Index is a broad indicator of countries’ competitiveness in terms of their international and domestic logistics strengths and business fundamentals.

Sixty-four percent of industry professionals surveyed for the 2020 Agility Emerging Markets Logistics Index say a recession is likely in the next 12 months. Only 12% of the 780 respondents say a recession is unlikely.

At the same time, most logistics executives believe their companies will sail through any turbulence in trade relations between the world’s two largest economies. Seventy-percent of those with operations and investments in China say they will stay put and that their plans are unchanged despite the U.S.-China trade battle.

“The fears of a recession are not to be taken lightly, especially because of uncertainty about the impact of the coronavirus outbreak. A positive sign, however, is that a large number of emerging markets economies were able to weather an array of issues — political and social unrest, structural problems, even international sanctions for some — without losing much ground in the past year.”

Essa Al-Saleh, CEO of Agility Global Logistics

The Index ranks 50 countries by factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers and distributors. In 2020, the top 10 emerging markets are: China, India, United Arab Emirates, Indonesia, Malaysia, Saudi Arabia, Qatar, Mexico, Thailand and Turkey.

China, India and Indonesia rank highest for domestic logistics; China, India and Mexico are top for international logistics.

So far as business is concerned, UAE, Malaysia and Saudi Arabia have the best business fundamentals according to the survey.

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