India emerges 2nd most attractive manufacturing hub, putting behind US

In the 2021 Global Manufacturing Risk Index, which assessed most advantageous locations for global manufacturing among 47 countries in the Americas, Europe and Asia-Pacific (APAC), India has scaled high at an impressive 2nd position. China remains at the 1st position.

The ranking in the index is determined on the criteria such as a country’s operating conditions and cost effectiveness. Due to cost competitiveness, India surged ahead of US in the ranking. US is now at the third position, followed by Canada, Czech Republic, Indonesia, Lithuania, Thailand, Malaysia and Poland. In the last year’s index, US was at second position while India ranked third. This is a positive sign that there is growing interest shown by manufacturers in India as a preferred manufacturing hub amongst destinations like US and countries in the APAC region. The country has a proven success rate in meeting outsourcing requirements. This has led to impressive rankings over the years.

The four key parameters that determined the ranking are:
• Country’s capability to restart manufacturing,
• Business environment (availability of talent/labour, access to markets),
• Operating costs
• Risks (political, economic and environmental)
.
Though India is almost at the top in the baseline and cost scenario rankings of the Global Manufacturing Index, it has to traverse a long way to combat geopolitical risks that affects businesses.