India: A Haven for Future Manufacturing

India might just be the next big name in global manufacturing. With global supply chains in
flux and businesses looking for alternatives beyond China, India is stepping up in a big way.
It’s got the scale, the talent, and the infrastructure push to make it happen. Let’s dive into
why more companies are placing their bets on India.

What Makes India a Strong Manufacturing Bet?
India recently overtook the UK to become the 5th largest economy in the world — and it’s well on its way to climbing to 3rd place by 2027, according to Morgan Stanley [1]. That’s a sign of serious economic momentum.

But it’s not just about GDP. India also has a massive demographic advantage. With a median age of 28.2 and over a billion people in the working-age group, the country is sitting on a goldmine of skilled and semi-skilled talent [2].

Looking for China Alternatives? Here’s Why India Stands Out

More and more global firms are following the “China Plus One” strategy, and India is quickly becoming the preferred “One.” Why? It’s got:

A huge labour pool.
Competitive production costs.
Government incentives that are hard to ignore

Just look at Apple. They’ve started assembling their premium iPhones — including the iPhone 16 Pro — right in Tamil Nadu. In fact, Apple recently airlifted around 1.5 million iPhones straight from India to the US to avoid Chinese tariffs [10]. That’s not just a side hustle. That’s scale.

Infrastructure Is Catching Up Fast

If there’s one thing that can make or break manufacturing, it’s logistics. India knows that — and it’s investing heavily:

Gati Shakti National Master Plan (Gati Shakti): This initiative focuses on upgrading
highways, ports, and railways to reduce logistics costs from 16% to 9% of GDP [4].
Production-Linked Incentive Scheme (PLI): Offers nearly $26 billion in incentives
across key sectors such as electronics and pharmaceuticals [4].
Supply Chain Resilience Initiative (SCRI): A trilateral partnership with Japan and
Australia aimed at strengthening supply chain resilience [5].

The message is clear: India wants to be a top-tier global manufacturing hub — and it’s investing in the necessary infrastructure to get there

India’s Got a Geopolitical Sweet Spot

Unlike the rising friction between some global powers, India has kept things pretty neutral. It maintains strong trade ties with the US, Japan, and the EU, and keeps the door open with China when needed [11].

Bilateral trade with the US alone is expected to leap from $191 billion to $500 billion by
2030 [11]. This projection reflects a clear ambition that is actively supported by policy
measures.

Powering the Future with Clean and Reliable Energy

Manufacturing needs power — lots of it. India’s working on that too:

Renewable capacity is projected to reach 170 GW by 2025, up from 135 GW in 2023 [12].
NTPC is planning to build several Small Modular Nuclear Reactors (SMRs) to phase out old coal plants [13].

By 2047, nuclear power alone could contribute up to 100 GW. That’s a serious upgrade in clean and stable energy.

What’s Happening on the Labour Front?

India’s workforce stats are trending in the right direction:

Labour participation is up, from 49.8% to 54.9% [9].
Female participation jumped from 23.3% to 32.5% [9].
Unemployment dropped from 6.0% in 2017-18 to 4.2% in 2020-21 [9].
Self-employment is on the rise too, from 52.2% to 55.6% [9].

All of this adds up to a more dynamic, resilient, and ready-to-work population.

So, Why Does This Matter?

India is more than just a backup to China — it’s becoming a go-to destination for companies that want a stable, future-proof manufacturing base.

With huge investments in infrastructure, clean energy, a growing workforce, and global trade ties, India is setting the stage to lead the next manufacturing wave.

If you’re looking to de-risk your supply chain or expand your production footprint, India might be exactly what you’re looking for.

Sources

1. Morgan Stanley. “India’s Impending Economic Boom”
https://www.morganstanley.com/ideas/investment-opportunities-in-india

2. India Briefing. “Why India?”
https://www.india-briefing.com/doing-business-guide/india/why-india
3. Reuters. “India should cash in on China Plus One strategy – World Bank Chief.”
https://www.reuters.com/world/india/india-should-cash-china-plus-one-strategyworld-bank-chief-2023-07-19/
4. Government of India. “About Gati Shakthi”
https://ne.pmgatishakti.gov.in/DoNER/about_pmgat

5. Nikkei Asia. “Japan, India, and Australia Launch Supply Chain Resilience Initiative.”
https://asia.nikkei.com/Spotlight/Supply-Chain/Japan-India-Australia-launch-SupplyChain-Resilience-Initiative
6. India Briefing. “India as an Emerging Global Manufacturing Hub.”
https://www.india-briefing.com/news/india-as-an-emerging-global-manufacturinghub-32736.html
7. S&P Global. “Make in India: Manufacturing Push Hinges on Logistics Investments.”
https://www.spglobal.com/en/research-insights/special-reports/lookforward/make-in-india-manufacturing-push-hinges-on-logistics-investments
8. China Briefing. China-India Economic Ties
https://www.china-briefing.com/news/china-india-economic-ties-trade-investmentand-opportunities
9. Ministry of Labour and Employment, Government of India. Labour and Employment
Statistics 2022
https://dge.gov.in/dge/sites/default/files/2022-08/Labour_and_Employment_Statistics_2022_2com.pdf
10. Reuters. “Apple airlifts 600 tons of iPhones from India to beat Trump tariffs”
https://www.reuters.com/technology/apple-airlifts-600-tons-iphones-india-to-beattrump-tariffs-sources-say-2025-04-10/
11. Indian Express. “On Trump tariffs and trade, India has the first mover’s advantage”
https://indianexpress.com/article/opinion/columns/on-trump-tariffs-and-tradeindia-has-the-first-movers-advantage-9935176/
12. IBEF. “Renewable Energy Industry in India”
https://www.ibef.org/industry/renewable-energy
13. Reuters. “India’s NTPC aims to build small nuclear reactors to replace old coal plants”
https://www.reuters.com/business/energy/indias-ntpc-aims-build-small-nuclearreactors-replace-old-coal-plants-2025-04-08/