Global firms eye India as supply chain diversification hub

Covid, chip shortages, tariffs and wars have made global companies prioritise supply chain resilience and security over low cost alone. India is emerging as a strong candidate for manufacturing bases, offering large manpower, diverse skills and a growing domestic market. Enquiries from eastern and European firms have risen after the West Asia and Ukraine crises, though US companies show less interest due to strong domestic growth.

Concerns remain over ease and cost of doing business. Power and logistics costs have improved, but land acquisition processes are complex and labour laws are difficult to navigate. Approval processes vary across states, causing delays. Large investors may get central government support, but companies must choose states carefully and plan for the long term.