Sourcing goods and services from India can be very cost-effective for many global businesses. This is not limited to the widely recognised outsourcing of IT-related services or back office processing, although India remains the top country for multinationals to outsource their overseas operations as indicated by the AT Kearney Global Services Location Index.

Other than a low cost advantage, India has unique features that make if an attractive procurement destination for businesses, including:

• A deep skills base and strong English proficiency
• A better understanding of Western business requirements
• The importance of long-term relationships for Indian manufacturers vis-à-vis short-term profits
• A stable business and political environment
• The presence of major international bank branches and logistics service providers

The Indian Prime Minister, NarendraModi, has also recently launched a new marketing campaign, ‘Make in India’, promoting India as the world’s next manufacturing powerhouse. This reflects the steady growth of manufacturing exports for India in skill-intensive sectors such as

• auto components and small cars
• engineered goods
• iron, steel and aluminium
• jewelry;
• leather goods;
• generic pharmaceuticals
• specialty chemicals
• power transmission and distribution equipment.

India is also unrivalled in its youth demographic providing it with an ever-increasing working age population: 65% of its population is 35 years of age or under and half the country’s population of 1.2 billion people is under 25 years of age

This can be contrasted with the Chinese population, which is beginning to age rapidly and will peak in 2026. Further, China is slowly losing its long-held competitive advantage in manufacturing to other Asian economies due to increasing labour costs - Nike, Microsoft and Samsung have moved their operations from China to Vietnam; the Taiwanese supplier of Apple’s iPhones and iPads has relocated its plants to Indonesia and small and medium-scale textile production has shifted to Bangladesh and Cambodia.

India by contrast offers excellent value for money in the labour pool.Its infrastructure is steadily improving with record investment in airports, bridges, city subway networks, ports and roads leading to better logistics. India is also consolidating its reputation as an offshore hub for knowledge services other than IT such as legal research, engineering R&D, content development, Pharmaceutical R&D, data analytics, equity research, and finance and accounting.

Our Assistance

Indelligence can source reputable suppliers in many industries. As our consultants are in business in India, they have well-established links to a range of established manufacturers and service providers. Accordingly, we can assist you in:

• Reviewing your sourcing strategy, after clarifying your aims and requirements
• Sourcing appropriate suppliers that meet your cost and quality criterion
• Benefiting from a “goodwill credit” by tapping into existing, long-term business relationships and gaining immediate status and trust of an older network member
• Developing a cost-effective supply chain and efficient logistics
• Reachinga quick resolution to any issues or differences that may arise with suppliers.

Contact Us for more information

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