The 'China Plus One' supply chain diversification strategy triggered by the global COVID-19 pandemic is creating opportunities for Indian players, says a report by India Ratings and Research.

Besides, the changing role of China's manufacturing sector in the global export value chain, is leading to the creation of growth opportunities for Indian companies.

Till recently, China was a world leader in several sectors such as home textiles and cotton apparel, but with the changing dynamics of the world supply chain, there is a considerable shift in its production strategy.

Unlike India or Pakistan, China does not have enough supply of cotton yarn, discouraging some of their local giants to invest further in this space. This scarcity however has led to Chinese manufacturers' increased interest in man-made fibres.

In India, this opportunity could lead to additional demand and consequently additional capex to the tune of Rs 120 billion over the next 10 years, adds the report.

Additionally, a new world of opportunities has opened up for India's footwear sector and few South Asian players as Chinese competitors have lost traction and started focusing elsewhere, driven by both low value addition and wage pressures.

India has a very fragmented footwear market; but given the increasing global footprint, this can change fairly quickly, and a few scaled-up players can gain market share.

In addition, the China, Plus One strategy is creating some order book growth for India's capital goods sector, the report adds.