Even if you are not in manufacturing you know that Chinese costs are going up. It’s in every newspaper, blog post, white paper, and each on-shoring article you read. So as cost rise manufacturers look to move production elsewhere. Countries like Vietnam, the United States, and Mexico are often top of mind solutions. What has been growing steadily outside of the mainstream media is the rise of contract manufacturing in India. Yes, India!
Why India? Here are 7 reasons why India is emerging as a world class global contract manufacturing center:
The Rupee has fallen against the US Dollar while the Yuan has risen. This makes exports from India more competitive.
2. Labor Shortages
As the Chinese worker moves to high tech facilities (for higher wages), there is gap in workers needed for more manual operations.
3. Labor Cost
Chinese labor rates continue to see an appreciation of 10% annually. Recently India Labor rates has seen appreciation but there basis is still much lower than in China.
No matter how inexpensive either labor or electricity is, if you do not have a stable infrastructure like electricity and roads, you cannot manufacture. India has been investing steadily to develop a strong infrastructure.
5. Shipping Rates
There can be as much as a 5 – 7% cost savings shipping from India to the United States compared to shipping from some ports in China.
Also known as, “Are you putting all of your eggs in one basket?” Having a redundant supply chain can help you avoid risk. Remember the earthquake in Japan a few years ago? Many companies are looking outside of China as geopolitical risks are still possible.
7. Raw Material
Did you know that bauxite is very plentiful in India and less abundant in China? Bauxite is a crucial raw material in the manufacturing process for stainless steel and other cast metals. That raw material source coupled with an increasing technical know-how has been producing some of the world’s best stainless and cast aluminum and steel products over the last decade.
So, while the world already knows, “Made in China”, the “Made in India” labels are growing quickly!
Check out the Metal Capabilities East West now has in India. Interested in learning more about East West and determining if we're the right partner for you? Set up a free consultation below and we'll be happy to discuss your project with you!