Forbes highlights India’s emerging role as a significant global manufacturing hub and a promising destination for supply chain diversification. With the increasing geopolitical tensions and instability impacting global supply chains, many companies are exploring alternative regions to reduce risks and enhance flexibility in terms of costs and lead times. India stands out as an attractive option due to several factors.
Firstly, India’s economy is projected to become the third-largest in the world by 2027, driven by a growing well-educated workforce, with a strong focus on STEM education and a large English-speaking population. Additionally, India’s strategic location, with well-established sea routes connecting it to the Middle East, Europe, West Africa, Southeast Asia, and East Asia, makes it an ideal transit point for international trade.
The Indian government has implemented various initiatives to support and incentivize manufacturing activities in the country. The National Policy on Electronics and the Production Linked Incentive program have encouraged the development of core components and attracted significant investments in the electronics and semiconductor industries. These incentives have now been extended to 14 additional industries, further boosting India’s manufacturing competitiveness.
India’s manufacturing sector is diverse, spanning industries such as aerospace, medical technology, automotive, and space technology. Major companies such as FedEx, Foxconn, Apple, and others are scaling up their operations in India, capitalizing on the incentives, skilled workforce, and favorable business environment.
The “Make in India” initiative, launched in 2014, aims to facilitate investment, foster innovation, enhance skill development, protect intellectual property, and build world-class manufacturing infrastructure. This program has positively impacted 25 identified sectors, including railways, defense, insurance, and medical devices.
Furthermore, India offers lower tariffs, averaging around 3% compared to 30% in China, and lower landed costs due to factors such as affordable labor, strategic location, and trade agreements that reduce tariffs and facilitate smoother import and export processes. The overall logistics efficiency and lower transportation costs further contribute to the lower total landed cost for businesses operating in the region.
As companies seek to diversify their global supply chains and mitigate risks associated with geopolitical tensions, India emerges as a promising destination. With its robust manufacturing ecosystem, government incentives, skilled workforce, and cost advantages, India is well-positioned to become a key player in the global manufacturing landscape in the coming years.
