India has rapidly emerged as a key player in the global manufacturing landscape, attracting businesses from across industries to set up or relocate their manufacturing operations. Its robust infrastructure, skilled workforce, and strategic advantages make it an unparalleled choice for companies looking to enhance scalability and efficiency.
This blog will explore the factors that position India as a manufacturing powerhouse and why businesses are increasingly incorporating India into their supply chain operations.
Cost-effective labour
The availability of cost-effective labour is one of India’s standout advantages. With a workforce of over 500 million, India offers abundant access to skilled and semi-skilled labour at relatively lower wages compared to many other countries. This creates a cost structure that is ideal for businesses seeking to improve profitability while maintaining efficiency.
For example, industries such as textiles, automotive, and pharmaceuticals have thrived in India primarily because of the cost advantage they gain from local manufacturing.
Skilled workforce
Beyond affordability, India boasts a highly skilled workforce. With an education system focusing on engineering, technology, and vocational training, businesses can find the talent required for high-quality manufacturing processes.
Ease of doing business
India has steadily climbed the World Bank’s Ease of Doing Business Index, moving from rank 142 in 2014 to rank 63 in 2023. Government-led reforms, including corporate tax cuts, streamlined regulations, and increased technological infrastructure, have made it simpler for businesses to establish and scale their operations in India.
Additionally, facilitating Special Economic Zones (SEZs) with tax holidays and fiscal incentives ensures that manufacturing set-ups have a smooth start.
Connectivity
India’s geographical location is another strong factor in its favour. Positioned strategically between the Middle East, Southeast Asia, and Europe, India offers global reach for exports. The country’s ports, roads, and rail networks have also witnessed rapid development in recent years, ensuring quick turnaround times for businesses exporting to the West or East.
Infrastructure advancements, such as the Dedicated Freight Corridor (DFC) and highway expansion, significantly improve transportation within India, making logistics more streamlined and time-efficient.
A focus on sustainability
India’s pledge to achieve net-zero emissions by 2070 makes it a preferred destination for businesses that prioritise environmental goals. The availability of renewable energy sources such as solar, wind, and hydro has made it easier for manufacturers to power supply chains sustainably.
The government is also incentivising industries to adopt environmentally-friendly practices through dedicated policies for clean energy manufacturing and reduced carbon pipelines.
Businesses that act now to explore India’s manufacturing potential could find themselves ahead of their competitors in cost control, scalability, and sustainability. Don’t overlook India’s promise to transform your business operations while supporting global growth.
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