Three major Asian countries India, Japan, and Australia, launched Supply Chain Resilience Initiative or SCRI, with a vision to prioritize certain sectors. The considered sectors include automobiles, petrochemicals, IT services, and others. As a result of this initiative, Japanese giants are shifting their manufacturing hub in India. This move is also encouraged by financial assistance from the Japanese Government and the favorable manufacturing conditions offered by India.

Major companies are considering shifting their manufacturing base in India due to the unusual disruptions in global supply chain management after the COVID-19 pandemic. Among the ‘MITI-V’ countries, India is slightly at the forefront of the race due to favourable market demand, Government initiatives, and extensive support from experienced manufacturing consultants India.

According to reports, from FY16 to FY20, the value of auto components in India increased from USD 10.83 billion to USD 14.5 billion. Apart from this, India offers a cost-effective manufacturing base. Additionally, compared with Europe and Latin America, the manufacturing costs are 10-25% less in India.

So, India, the world’s 4^th largest vehicle market, is booming in the auto sector and is expected to reach USD 300 billion by 2026.

India- The Alternative Global Manufacturing Hub for Foreign Investors

India, often considered China’s competitor for the manufacturing sector, is looking for the next big thing in the manufacturing industry. An example includes Japan. The Japanese Government has proposed to offer approximately 23.5 billion Yen (About USD 217 million) for the companies looking to shift their manufacturing base to other countries.

India is certainly a favourable choice for most foreign companies due to its cheap labor costs and attractive Government initiatives. Despite the pandemic, the automobile export shot up in the first half of 2021. As per reports the first half of 2021, automobile exports achieved the highest performance in the last seven years.

The exports increased by 49.9% year on year to 23.6 billion dollars. It should be noted that companies from US, South Korea, Japan, and other countries are not only looking to shift to India as their manufacturing for its rising economy but also for its demographic advantages.

Apart from alluring advantages, the ‘Make in India’ initiative triggered the ease of manufacturing in India. India is also developing land of 462,000 hectares to attract businesses looking to invest in manufacturing.

‍