Companies that are looking to outsource manufacturing to Asia have numerous options. China is undisputed the largest economy in Asia and the second largest worldwide. However, many companies may find that partnering with suppliers in India makes the most sense. Since the beginning of the last decade, the government of India has made a concerted effort to shift their nation from a service-oriented economy to a manufacturing base. India has adopted crucial reforms to spur infrastructure investment which many economists say will make the country a major hub of global manufacturing. India also possesses demographic advantages which some analysts predict could lift this nation, historically mired in poverty, to become the third largest economy by 2030.
What are the advantages of manufacturing in India?
Global giants such as GE, Siemens, HTC, Toshiba, and Boeing have chosen to manufacture in India. If you’re wondering why, here is a brief overview of the advantages of taking your manufacturing needs to India:
- Ease of communication — English is a national language of India, so it can be much easier to communicate your needs and negotiate terms there than elsewhere in Asia.
- Business friendly government — Under the Make in India program, the government has instituted many reforms to make it easier for businesses to get up and running. Efforts have been made to simplify and rationalize the regulatory environment. Less red tape means there’s more competition for your business. This leads to better terms and higher quality.
- New and growing infrastructure — The national government and each state in India has committed to building industrial zones with new and rebuilt infrastructure to accommodate industry. This includes sector specific clusters of industrial parks for electronics, automotive and textile manufacturing, as well as other industries.
- Skilled workforce — India has a relatively young and educated workforce. Indian talent includes individuals with strong technical and engineering capabilities, as well as labor capable of performing precision tasks. The government is committed to skill development to encourage workforce mobility and enhance youth employability.
- Low labor costs — The average daily cost of a factory worker in India is less than 20 percent of the daily wage in China, and significantly less than the daily wage in Indonesia, Vietnam, the Philippines and Mexico.
- Abundant materials — Although India imports much of its raw materials from China, it also boasts abundant domestic production of materials ranging from cotton to steel.
- Stability — With more than one billion consumers and a burgeoning middle class, India’s domestic economy is stable, and the government generally has the support of the people.
- Transportation —India is closer to many Western markets than China and other Far Eastern nations, so delivery can be accomplished in less time and often at a lower cost.
All these elements make India a great source for quality products at a low cost.
Industries attracted to Indian manufacture
Which industries are most likely to benefit from Indian manufacture?
Major sectors include:
- Textiles and apparel — With domestic supplies of cotton, wool, silk and synthetics; easy access to China for supplementary materials, and centuries of knowledge, India is a leader in global textile production from fabric to finished garments to home textiles.
- Leather products — India is a leader in the production of leather apparel, shoes and accessories.
- Electronics — India has the world’s third largest pool of scientists and technicians, so research and design capabilities are advanced. The workforce is skilled and cost-effective.
- Kitchenware — Stainless steel is available in abundance at a good price allowing for high-quality utensils, vacuum bottles and other items.
Getting the most out of Indian manufacturing
Although the potential advantages of Indian manufacturing are huge, outsourcing your company’s supply chain thousands of miles away is not the easiest thing to do. All suppliers are not equally reliable, and a few are outright fraudulent. Fortunately, Umac-HMT can point you in the right direction. For decades, we have worked to develop a reliable network of Asian suppliers across numerous industries. We can help you protect your investment and obtain the highest quality products from our fully vetted and diversified supplier base in India.
