By Subrara Majumder
Geographically, West Bengal is placed at a unique place which can leverage it to be an important destination for the development of a formidable alternative supply chain hub. Since May 2026, given the surprise victory of BJP – a pro-industrial politically motivated political group, West Bengal eyes revitalisation of industry after half a century.
Prior to 1977, West Bengal was an engineering industrial hub. It slipped to an agrarian-based economy after the communist Left Front government came to power, and ruled for 34 years, followed by Trinamool Government (TMC) for 15 years. Though TMC was not averse to industrialisation, it damaged further the industrial economy, overshadowed by politically-connected extortion racket, known as tola baji sarkar, thus severely denting its model of governance.
China+1 has emerged as a global strategy for MNCs to diversify investment in low-cost manufacturing for expansion, while also minismising risks for over-dependence on a single nation like China.
West Bengal offers a dynamic platform for industrialisation, owing to its geographical and infrastructure advantages. It serves as a critical border trade corridor for northeast India and neighbouring countries (Bangladesh, Nepal, Bhutan and Myanmar) and is also the gateway to Southeast Asia. Given the benefits of long surface-trade connectivity and geographical proximity to three nations, West Bengal pitches for a unique advantage for dominant trade and investment partnerships.
West Bengal serves as the gateway to Southeast Asia, and can crucially for a nodal point to reinforce the paradigm shift that happened under Prime Minister Narendra Modi to lock in Asia under the ‘Act East’ policy. With the coming to power of the BJP in West Bengal, the state can now emerge as a potential destination for supply chain manufacturing, and could be vying for a challenge to ASEAN-led dominance of the supply chain.
India is planning to build 7-8 new international land ports in West Bengal to expand border trade with Bangladesh and Nepal. Currently, a single land port Petrapole in West Bengal functions as its primary operation port. According to Land Port Authority of India, the Petrapole check-post handles roughly 70 percent of land-based trade between India and Bangladesh.
The China+1 strategy unfolded big advantage for ASEAN to emerge as the coveted destination for MNCs to diversify investment for manufacturing supply chain. Notable examples are chip testing and packaging factories in Malaysia, manufacturing for electrical vehicle supply chain in Indonesia and expansion of consumer electronics production facilities in Vietnam.
Closer economic ties between ASEAN-6 (Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam) and China and USA led to considerable production relocation of low-cost products from China to ASEAN countries.
On the one hand, China and ASEAN-6 (Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand) were engaged in FTA in 2010. On the other hand, ASEAN-6 became part of US led IPEF (Indo-Pacific Economic Framework), which fortify for critical supply networks and reduce dependence on any single nation.
Both these cases capitalise on ASEAN as a primary destination under China+1 strategy and an emerging alternative destination for supply chain and re-shoring of China’s exports to USA.
West Bengal provides a stiff competition to ASEAN – both in terms of border trade and domestic demand. Besides long border, which fetches a major share in road trade, West Bengal provides a bigger domestic demand, tied within India. At present, India, which has the largest population in the world and records one of the highest growth rates in GDP, pitches for a bigger domestic demand and higher manufacturing capacity. In contrast, larger share of intra-ASEAN trade moves through maritime shipping.
West Bengal is primed for ample opportunities for investment, having connectivity to South East Asia through the proposed Bangladesh-China-India-Myanmar Economic Corridor project (BCIM) and Kaladan Multi-model Transit Corridor project (KMTCP). Both projects will pass through West Bengal.
USA emerged as a notable force for diversifying investment into India under the China+1 strategy. Despite US tariff turbulence, crucial investments, such as the one by Apple, continue.
Notwithstanding that, India has been left behind by ASEAN in attracting foreign investment under the China+1 strategy. The chief obstacle is the restriction on Chinese investment in India.
Foreign investors, shifting from China, are hamstrung by the restriction on Chinese investment in India. Their manufacturing in China, supported by Chinese supply chain manufacturing, such as joint venture with Chinese firms, find it difficult to shift base to India. This is because India permits Chinese investment with less than 10 percent Chinese share, to avail the benefit of the automatic approval route.
West Bengal is a propitious destination for manufacturing supply chain industry. It is a low-cost capital intensive and intermediate technology skill-oriented state. West Bengal can be an important destination for electronic and pharmaceutical industry under the China+1 strategy. Manufacturing and assembly of mobile phones and electronic components are low capital and labor-intensive industries. (IPA Service)
