The Global Manufacturing landscape is indeed witnessing a shift from China to India. India’s “Make in India, Make for the World” initiative and the government’s efforts to make it easier for businesses to set up manufacturing units in the country have attracted foreign manufacturers. The country offers several advantages, including a sizable and trainable workforce, digital infrastructure, investments in logistics, strategic location, cost advantages, and a strong legal system with patent protection.
According to a CNBC report, US aircraft manufacturer, Boeing is looking to begin production in India. Boeing’s $34 billion deal with Air India for the supply of aircraft will be seen as a test for both businesses and the south Asian economic powerhouse, which is making every effort to draw foreign firms in an effort to establish itself as a major manufacturing base as Western businesses strive to reduce their reliance on China, the de facto global factory.
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“As a company with over seven decades of presence in India, Boeing continues to support the development of indigenous aerospace and defence capabilities in the country,” CNBC quoted Dave Schulte, the commercial aeroplanes managing regional director of marketing for Boeing’s Asia Pacific and India region, as saying.
Forbes quoted Upasana Joshi, the principal analyst for mobile devices research at International Data Corporation (IDC) as saying, “More than 70 per cent iPhones in India were locally manufactured in 2022, up from less than 40 per cent in 2020. While it will be immensely challenging for Apple to move its entire value chain from China to India, we can say that gradually India is getting ready to enter the critical parts of the value chain related to electronics manufacturing.”
Companies like Boeing and Apple are already taking steps to establish production in India. Boeing is looking to start production in India through a deal with Air India, while Apple has been diversifying its production away from China and has been manufacturing iPhones in India.
However, there are challenges in manufacturing in India, such as high tariffs, outdated labour regulations, regulatory uncertainty, and infrastructure constraints. Labour shortage and acquiring land with clear titles are also concerns for businesses. Additionally, cracking the Indian market can be challenging, as companies need to cater to the specific demands and preferences of local customers.
Despite these challenges, India’s manufacturing potential and the incentives offered by the government are attracting companies looking to diversify their production away from China. As this trend continues, India may become a significant global manufacturing and export hub in the future.
