India has been ranked as the second most sought after manufacturing destination in the world. It is just behind China and overtook the United States to take second place. India, however, slipped one spot in the cost scenario and was overtaken by Indonesia.
The Cushman and Wakefield 2021 Global Manufacturing Risk Index said India could benefit from relocations from China to other parts of Asia, as it already has an established base in pharmaceuticals, chemicals and other parts of Asia. engineering – sectors that continue to be a central concern of the United States. Trade tensions in China. However, he said reforms to land and labor laws are key to ensuring India’s success as a global manufacturing hub.
The baseline scenario gives equal importance to a country’s operating conditions and cost competitiveness.
Meanwhile, China has maintained its leadership position and continues to diversify its manufacturing base. The report says that even with the Biden administration’s concerns about trade, China continues to diversify its base to move up the value chain and focus on telecommunications, high tech and computers. Guangdong and Jiangsu regions spearhead its electronic components and automobile manufacturing, while Zhejiang and Liaoning focus on chemicals and natural resources.
The United States is a desirable hub because it offers a large consumer market as well as state and federal incentives. But its rapid adoption of technology and policies could make it a formidable competitor to China, according to the report.
On the cost scenario, India and Vietnam were overtaken by Indonesia, while China retained its leading position. India slipped to third, while Indonesia dropped from fifth to second.
The report says falling rents in Jakarta have a role to play in profitability, which has pushed Indonesia up three places. While labor costs in Vietnam are cheaper than in China, it faces increasing competition from lower-cost locations. Likewise, Thailand’s cost profile dropped it from eighth to fifth place. Colombia, whose labor costs are similar to those of Asia, dropped from 15th to eighth place.
But when it comes to the risk scenario which takes into account lower levels of economic and political risks, India is far from the top. India was clubbed in the third quartile of the rankings along with Malaysia, Belgium, Indonesia, Bulgaria, Romania, Thailand, Hungary, Colombia, Italy, Peru and Vietnam. At the top of the first quartile is China, followed by Canada, the United States, Finland and the Czech Republic. The second quartile includes countries like Lithuania, France, Netherlands, Spain, Poland, Japan, UK, etc.
Likewise, with regard to the rebound score which takes into account the ability of a country to restart its manufacturing sector, India is in the fourth quartile with Sri Lanka, Mexico, Vietnam, Indonesia. , Bulgaria, Thailand, Tunisia, Peru, the Philippines and Venezuela. .
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