India has been ranked as the world’s second-most-desired manufacturing destination. It is only second to China, and it has surpassed the United States to take second place. In the cost scenario, India, on the other hand, fell a notch and was overtaken by Indonesia.
According to the Cushman and Wakefield 2021 Global Manufacturing Risk Index, India could benefit from relocations from China to other parts of Asia because it already has a strong base in pharmaceuticals, chemicals, and engineering, all of which are still at the centre of trade tensions between the US and China. Reforms in land and labour laws, on the other hand, are critical to India’s success as a global manufacturing hub, according to the report. In the baseline scenario, the operating conditions and cost competitiveness of a country are given equal weight.
Meanwhile, China has maintained its leadership position and is expanding its manufacturing base. Despite the Biden administration’s concerns about trade, China continues to diversify its base in order to focus on telecom, high-tech, and computers, according to the report. Electronic components and automotive manufacturing are led by Guangdong and Jiangsu, while chemicals and natural resources are concentrated in Zhejiang and Liaoning.
The United States is a desirable hub because it has a large consumer market as well as state and federal incentives. However, the report stated that its rapid adoption of technology and policies could make it a tough competitor to China. In terms of cost, Indonesia surpassed India and Vietnam, while China maintained its lead. India dropped to third place, while Indonesia jumped from fifth to second place.
According to the report, Jakarta’s falling rents have a role to play in the country’s cost-effectiveness, which has pushed it up to three spots. While wages in Vietnam are lower than in China, the country is increasingly facing competition from lower-cost countries. Thailand’s cost profile, meanwhile, has moved it up to the fifth place from eighth. Colombia, which has labour costs compared to those in Asia, rose from 15th to eighth place.
India, on the other hand, is nowhere near the top of the risk scenario that takes into account lower levels of economic and political risks. India is grouped with Malaysia, Belgium, Indonesia, Bulgaria, Romania, Thailand, Hungary, Colombia, Italy, Peru, and Vietnam in the third quartile of the rankings. China leads the first quartile, followed by Canada, the United States, Finland, and the Czech Republic. Lithuania, France, the Netherlands, Spain, Poland, Japan, and the United Kingdom are among the countries in the second quartile.
India, like Sri Lanka, Mexico, Vietnam, Indonesia, Bulgaria, Thailand, Tunisia, Peru, Philippines, and Venezuela, is in the fourth quartile when it comes to the bounce back rating, which considers a country’s ability to restart its manufacturing sector. You can download the report from this link: Global Manufacturing Risk Index | Industrial Research | Cushman & Wakefield (cushmanwakefield.com)
