Talking to SME owners these days is like drinking chai on a roller coaster: it is exciting, has a dose of chaos and nobody knows where the next curve will take them. When you are walking around an industrial park in Pune or Coimbatore in 2025, the majority of the discussions would end up at the same point of what you need to do to ensure your business does not get drowned in a particularly Chinese crisis. It is not surprising that everybody is betting on China Plus One.
How Indian Manufacturers Are Redrawing Their Supply Chains?
The change is regarding survival in a world of spanners out of the blue. The Indian manufacturers have taken bitter lessons in recent years. There is a tariff spike in the middle of the night, borders are shut, and even the previously stable Chinese parts supplier cannot deliver parts for weeks.
This is not their Chinese issue, but their world problem. The 21% increase in Indian buyer audits of suppliers this year indicates that companies are not leaving but are simply putting the steel and the iron on the fire more firmly, reviewing contracts anew, and maintaining a watchful eye on delivery times.
Small Moves, Big Shifts: How SMEs Are Adapting Step by Step
Use a mid-size electronic company in Noida. Their logistics manager and I discussed over a cup of chai: we take basic assembly to Thailand because it is cheaper, and the skilled level is very good. The costly LCD displays, however, are still manufactured in Shenzhen; they have mastered the manufacturing process. Moving all the things elsewhere is a dangerous step, and thus, companies relocate bit by bit. Mumbai exporters’ alternative to Vietnamese yarn is that when they require bright dyes, they prefer Shanghai. It is not a wholesale business of changing partners, but a kind of puzzle where the corners are constantly moving.
The New Stops in India’s Supply Chain Journey
In 2025, Vietnam exported $340 billion, with electronics and textiles as the main drivers. The key buyers include Indian manufacturers and Mexico, although, surprisingly, it is a popular destination among automotive SMEs following the 400 billion export boom to the U.S. The nation has trade agreements and closeness that ensure shipping is pain-free. Vietnam and Thailand have also provided superior trade agreements and tax breaks, which is why one of the manufacturers of auto components in Pune remarked that, should China sneeze, we do not want to sneeze; the USMCA in Mexico provides smooth sailing in North American shipping.
The Hidden Headaches of Diversification
One can fantasize about smooth, less expensive supply chains, but the reality of sourcing microchips beyond China is grim. Plastics are imported into Vietnam, whilst chips and core electronics continue to be imported from Shenzhen. A Bengaluru SME owner joked that maybe one day we will get everything in a single place, but today, we are juggling. New associates’ trainings, deliveries missing because of unfamiliar national holidays, and other curve balls are the norm. It is said that most people say, A headache today is worth a crisis tomorrow.
Lessons from the Ground
When the plans go awry, the narration of the story is nearly to the point. One of my friends in logistics, Raj, was so thrilled about his Vietnam plan until the festival time took three weeks off, since no one in the group checked the local calendar. “Lesson learned,” he said. “Every new supplier? First question, when is your largest holiday? Minor issues that cannot be captured in spreadsheets result in shipment delays, new port charges, and panicked WhatsApp messages. A quick solution, a jugaad, can precede GST paperwork.
The True Spirit of China Plus One
Indian SME is not leaving China behind. The China Plus One strategy is not a separation strategy; it is a diversification strategy. Supply-chain managers desire alternatives in their back pocket, an insurance net that also enables them to breathe even when the global winds are blowing hard.
You find this everywhere, from lunch counters in Tirupur to late-night calls in Noida. The China Plus One playbook is not about risk; it is about resilience, about achieving a middle ground when the bottom goes. It is dishevelled and rough, but still refreshingly realistic.
The next time you receive a box labelled Made in India, then you are to bear in mind: There is a spoonful of Vietnam, a shot of Mexico, and a pinch of China lurking behind it all. The playbook is developing, yet it is probably the most human approach that we have.
