The Rise of India as a Manufacturing Hub
A couple of decades ago, India was considered to be a third world country with limited economic potential. When the idea of outsourcing first came up, most executives in the United States thought that Central American nations or Ireland would prove to be a better fit. However, two decades later, India is the ultimate destination for outsourcing software services as well as knowledge processes.
After having achieved dominance in the service sector, India is now looking towards becoming a global manufacturing hub. This intention has been made clear by the Make in India initiative that has been launched by Prime Minister Modi. As a part of this initiative, special concessions have been announced for multinational companies to create manufacturing bases in India. This has definitely drawn the attention of many American companies that are looking to reduce the dependence of their supply chain on China. It would be inappropriate to say that within a short span of time India will compete with the likes of Japan, Germany, and China. However, the process for transforming the manufacturing sector has already begun.
In this article, we will have a closer look at the reason why India is poised to grow into a manufacturing hub as well some of the problems that it is likely to face during the journey.
Why Multinational Corporations Want to Relocate Manufacturing Operations in India?
The Problems with Manufacturing Sector in India
One of the most obvious problems with the manufacturing sector in India is that the infrastructure is not that well developed. As a result, the cost of manufacturing is very high as compared to global leaders like China. India has started working on that issue with great intensity. It is likely that within a few years, India will also have infrastructure as China does.
Some of the other problems with the manufacturing sector in India are as follows:
To sum it up, it is likely that Indias manufacturing sector will grow by leaps and bounds. There are some challenges that will come up. However, they are not so severe that India Inc. cannot face them.
Authorship/Referencing - About the Author(s)
The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.