India has been gaining traction as a global manufacturing hub. There has been tremendous untapped potential for this market to become a greater force in global manufacturing given the country’s massive population and its position as the world’s third largest economy by purchasing power parity as of 2024. Many foreign manufacturers have begun opening up operations in India through equity joint ventures, strategic alliances, or wholly owned subsidiaries. These entering manufacturers operate mainly in the automotive, engineering, chemicals, pharmaceuticals and consumer durables sectors (Patel, 2024).

Last week, the Indian Government unveiled a plan to incentivizing India’s growth in domestic manufacturing with $1.3 billion awarded to private companies boosting local manufacturing over the next year. This figure is in addition to the over $500 million already distributed. These incentives have effectively lowered manufacturing costs in the country (Tiwary, 2024).

Boston Consulting Group credit’s the rise in activity to India’s geopolitics: it promises less government intervention, fewer intellectual property concerns, and a lower probability of disruptive tariffs on international trade than China offers. Many manufacturers have been adding Indian locations to hedge the risk associated with their Chinese operations. BCG also cites India’s large trainable workforce and low labor costs as catalysts of it’s growing enterprise.

The Federation of Indian Export Organizations has projected that that nation’s exports are likely to rise to $900 billion in 2023-24 from $770 billion the previous year on rising demand from companies around the world (Kashyap, 2023).

Many companies like Apple, Motorola, Lenovo, have recently opened moved production to India and as a result electronics exports have more than doubled over the last two years from $10.6 billion in 2021 to $22.7 billion in 2023. This sector has also been influenced by a new range of import tariffs and restrictions on imported mobile phones, laptops, and tablets. Apple currently makes 7% of its smart phones in India and this number is projected to rise to 25% in the coming years (Bahree, 2023).

India’s factories themselves have been undergoing some transformation. Usage of smart factory technology such as Internet of Things and Artificial Intelligence are on the rise with the first fully integrated smart factories emerging in 2024. Environmental concerns and a growing demand for sustainably produced products have been driving an increase in renewable energy source integration, optimized resource utilization, and other eco-friendly practices. The growing presence of global manufacturers has also spurred an increased focus on data security (A Sneak Peek…, 2024).