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Overseas Manufacturing: Why India?

Everything you need to know about manufacturing in India vs manufacturing in China. Sustainable sourcing simplified.

8 January 2018

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Overseas Manufacturing: Why India?

  Since economic reform in the 1980s China has dominated manufacturing in Asia by virtue of quantity of output. This position is under threat from the challenge posed by India.

Prime Minister Narendra Modi’s ‘Make in India’ initiative has facilitated market entry for new brands and stimulated an 80% growth in foreign investment in Indian manufacturing in 2016 [1][2]. Prime Minister Modi has also announced an economic stimulus package of $7 billion dollars to further growth [3]. Investment on this scale gives notice that India is very much open for business. This is evidenced by the energy with which it is developing an ideal environment for product designers and creators of any size to find cost effective, sustainable and high-quality manufacturing services.

The growth in India is taking place at a time when social and environmental sustainability are a focus of international and domestic discourse. The 17 Sustainable Development Goals set out by the international community in 2016 were welcomed by Prime Minister Modi. At the United Nations in clear terms he said, ‘much of India’s development agenda is mirrored in the Sustainable Development Goals [4]. This state support for sustainability coupled with economic stimulation has created a uniquely exciting opportunity for investment in Indian manufacturing to have a positive impact across the supply chain. It will allow India to become sustainable creator of high quality produce and wealth into the future [5].

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These developments create an environment where benefits accrue from the top down and the bottom up. Consumers around the world are becoming more discerning and demanding. In turn, they react positively to manufacturers that turn out high quality products via sustainable means. In more than 65% of emerging markets, consumers actively seek sustainable fashion and are willing to pay more for it.

Grace Farraj from Nielsen’s Public Development and Sustainability Department summarises the outlook; ‘brands that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too’ [6].

We are seeing increased competition between major manufacturing economies such as China and India and a disruption of the established economic hierarchy. This is creating conditions in which consumers are listening to positive manufacturing stories, especially clothing manufacturers overseas. In an age of uncertainty, the stage is set for Indian manufacturing to write these stories [7].

Don't know how to find an overseas manufacturer for your product? Supplycompass can help. www.supplycompass.com 

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[1] India Brand Equity Foundation, Manufacturing Sector in India, (July 2017) https://www.ibef.org/industry/manufacturing-sector-india.aspx [Accessed 15/09/2017]

[2] Deloitte, Growing Power of Luxury Goods 2017, (2017) https://www2.deloitte.com/content/dam/Deloitte/global/Documents/consumer-industrial-products/gx-cip-global-powers-luxury-2017.pdf [Accessed 16/09/2017]

[3] The Economic Times, India Considering $7.7 billion Stimulus Spending in 2017/18: Government Sources (September 2017) http://economictimes.indiatimes.com/news/economy/finance/india-considering-7-7-billion-stimulus-spending-in-2017/18-government-sources/articleshow/60780738.cms [Accessed 26/09/2017]

[4] Eco Business, Why sustainability standards are important for India’s growth (October 2016) http://www.eco-business.com/news/why-sustainability-standards-are-important-for-indias-growth/ [Accessed 26/09/2017]

[5] McKinsey & Company, The State of Fashion 2017

[6] Nielsen, Green Generation: Millennials Say Sustainability Is A Shopping Priority, (05/11/2015) http://www.nielsen.com/uk/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html [Accessed 16/09/2017]

[7] McKinsey & Company, The State of Fashion 2017


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