The examine, titled ‘Harnessing the Tectonic Shifts in World Manufacturing’, mentioned the shifts in manufacturing and sourcing occurred in a variety of industries as world firms have needed to rethink their manufacturing and sourcing methods resulting from commerce wars, the pandemic, geopolitical tensions and provide bottlenecks. And as firms reconfigured methods, India turned one of many most popular manufacturing spots.
Semiconductor and materials shipments from India to the US surged by 143% over the previous 5 years, albeit from a modest start line, whereas China noticed a 29% lower in these exports. Exports of Indian auto elements to the US elevated by 65%, and mechanical equipment exports grew by 70%.
“For the previous twenty years, we’ve heard speak of India’s potential in manufacturing, usually with a lingering query mark. Now, it appears that evidently many items of the puzzle are falling into place. What units this examine aside is its complete perspective, not solely delving into the reconfiguration of worldwide provide chains but additionally offering validation to the rising narrative of India as a producing hub,” mentioned Ravi Srivastava, world chief, operations apply, BCG.
In line with the examine, India enjoys a robust benefit in direct manufacturing prices as an export platform. As per BCG’s calculations, the typical landed value of Indian-made items imported into the US, together with manufacturing facility wages adjusted for productiveness, logistics, tariffs and vitality, is 15% decrease than if the products are made within the US. In contrast, the typical US landed value from China is simply 4% decrease than US prices and 21% increased for items topic to US tariffs associated to the commerce conflict.Trying forward, BCG sees a transparent alternative to additional speed up the expansion trajectory as a strategic manufacturing and sourcing spot, however the choice to decide on India’s position in corporations’ methods depends upon a fancy interaction of things, and there is not a one-size-fits-all reply.