India overtakes US to become 2nd Most attractive Manufacturing Hub

August 25, 2021

According to real estate consultant Cushman amp, Wakefield, India has overtaken the United States (US) to become second-most attractive manufacturing destination internationally.

Key Points

India’s improvement is driven mainly by cost competitiveness.
Ranking got switched due to plant relocations from China to other parts of Asia towards already established base in pharma, chemicals and engineering sectors.
China maintains its number one position according to 2021 Global Manufacturing Risk Index.
This index assessed the most advantageous locations for global manufacturing across 47 countries in Europe, Asia-Pacific and the Americas.
In the year 2020, US was at second position while India was at third.
US has slipped to third position. It is followed by Canada, Czech Republic, Indonesia, Lithuania, Thailand, Malaysia and Poland.

What does it indicate?

Improvement in India’s ranking indicates that manufacturers are showing growing interest in India as a preferred manufacturing hub as compared to other countries, including the US and countries in APAC region.

Why focus is towards India?

Focus is shifting towards India because of its operating conditions and cost competitiveness. Furthermore, India’s proven success in meeting outsourcing requirements has helped in improving the ranking year on year.

How ranking is determined?

Rankings in the report are determined on the basis of four key parameters:

Capability of country to restart manufacturing.
Business environment such as availability of talent or labour and access to markets.
Operating costs and
Risks including the political, economic and environmental risks.