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.hustle-select2 + .select2.select2-container--open .select2-selection--single .select2-selection__arrow {color: #49E2D1;}.hustle-ui.module_id_1 .hustle-select2.hustle-field-error + .select2 .select2-selection--single .select2-selection__arrow {color: #D43858 !important;}@media screen and (min-width: 783px) {.hustle-ui:not(.hustle-size--small).module_id_1 .hustle-select2 + .select2 {box-shadow: 0px 0px 0px 0px rgba(0,0,0,0);-moz-box-shadow: 0px 0px 0px 0px rgba(0,0,0,0);-webkit-box-shadow: 0px 0px 0px 0px rgba(0,0,0,0);}.hustle-ui:not(.hustle-size--small).module_id_1 .hustle-select2 + .select2 .select2-selection--single {padding: 0 19px 0 19px;border-width: 1px 1px 1px 1px;border-style: solid;border-radius: 0px 0px 0px 0px;}.hustle-ui:not(.hustle-size--small).module_id_1 .hustle-select2 + .select2 .select2-selection--single .select2-selection__rendered {padding: 10px 0 10px 0;font: normal 14px/22px Open Sans;font-style: normal;letter-spacing: 0px;text-transform: none;text-align: left;}.hustle-ui:not(.hustle-size--small).module_id_1 .hustle-select2 + .select2 + .hustle-input-label {font: normal 14px/22px Open Sans;font-style: normal;letter-spacing: 0px;text-transform: none;text-align: left;}}.hustle-module-1.hustle-dropdown {background-color: #FFFFFF;}.hustle-module-1.hustle-dropdown .select2-results .select2-results__options .select2-results__option {color: #5D7380;background-color: transparent;}.hustle-module-1.hustle-dropdown .select2-results .select2-results__options .select2-results__option.select2-results__option--highlighted {color: #FFFFFF;background-color: #ADB5B7;}.hustle-module-1.hustle-dropdown .select2-results .select2-results__options .select2-results__option[aria-selected="true"] {color: #FFFFFF;background-color: #38C5B5;}.hustle-ui.module_id_1 .hustle-timepicker .ui-timepicker {background-color: #FFFFFF;}.hustle-ui.module_id_1 .hustle-timepicker .ui-timepicker .ui-timepicker-viewport a {color: #5D7380;background-color: 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content-header-center content-header-full content-header-featured wrap"> <div class="content-header-inner wrap"> <div class="wrap-inner"> <div class="page-title"> <h1 class="page-title-inner">Everything you need to know about manufacturing in India</h1> </div> <div class="breadcrumbs"> <div class="breadcrumbs-inner">  <span property="itemListElement" typeof="ListItem"><a property="item" typeof="WebPage" title="Go to Sourcify." href="https://sourcify.com" class="home" ><span property="name">Sourcify</span></a><meta property="position" content="1"></span> > <span property="itemListElement" typeof="ListItem"><span property="name" class="post post-page current-item">Everything you need to know about manufacturing in India</span><meta property="url" content="https://sourcify.com/india-production-guide/"><meta property="position" content="2"></span> </div> </div> </div> </div> <div class="down-arrow"> <a href="javascript:;"><span>Scroll Down</span></a> </div> </div> <div id="content-body" class="content-body"> <div class="content-body-inner wrap">  <main id="main-content" class="main-content" itemprop="mainContentOfPage"> <div class="main-content-inner"> <div class="content"> <h2>What Does India Manufacture?</h2> <p><span style="font-weight: 400;">Apple and Samsung are two of the biggest companies to adopt the ‘China Plus One’ strategy. They have expanded their sourcing of manufactured products beyond China. Their strategy reduces operating costs and reliance on a single source. India is one of their key ‘Plus One’ manufacturing hubs. </span></p> <p><span style="font-weight: 400;">As a manufacturer, India offers a pool of labor to match China’s. India has several big advantages. </span></p> <ul> <li><span style="font-weight: 400;">lower labor costs, </span><span style="font-weight: 400;"> </span></li> <li><span style="font-weight: 400;">greater political and economic stability, </span></li> <li><span style="font-weight: 400;">proximity to other ‘Plus One’ countries, </span></li> <li><span style="font-weight: 400;">and a government investing in its growth.</span></li> </ul> <p><span style="font-weight: 400;">This Indian Production Guide will give you everything you need about <a href="https://sourcify.com/what-you-need-to-know-about-manufacturing-in-india/" target="_blank" rel="noopener">manufacturing in India</a>. You can then consider India as your own ‘Plus One’. </span></p> <h2><b>Understanding the Manufacturing Landscape in India</b></h2> <p><span style="font-weight: 400;">India and the United States share many similarities. </span></p> <ul> <li><span style="font-weight: 400;">Both are former British colonies, with India gaining independence in 1947. </span> <ul> <li><span style="font-weight: 400;"> </span><span style="font-weight: 400;">India like the United States, is a federation of 28 states and 8 union territories.</span></li> <li><span style="font-weight: 400;">India has a written constitution.</span></li> </ul> </li> <li><span style="font-weight: 400;">Power is divided between the Central government and the state governments. </span> <ul> <li><span style="font-weight: 400;">The central government handles all matters of national importance like defense, foreign affairs, and monetary policy.</span></li> <li><span style="font-weight: 400;">The state governments handle issues like education, health, and law and order. </span></li> </ul> </li> <li><span style="font-weight: 400;">Both have an independent judicial system, hold democratic elections, and struggle with </span><span style="font-weight: 400;"> </span><span style="font-weight: 400;">balancing issues between central and state government relations over time. </span> <ul> <li><span style="font-weight: 400;">A key similarity is that English is the official language in India. It is the spoken language </span><span style="font-weight: 400;"> </span><span style="font-weight: 400;">across education, government, business, and media. </span></li> </ul> </li> </ul> <p><span style="font-weight: 400;">India has several key manufacturing hubs. </span></p> <p><span style="font-weight: 400;">Each is in a different state, while Delhi is one of the 8 Union Territories. </span></p> <ol> <li><span style="font-weight: 400;"> State of Maharashtra: automotive, textile, and electronics industries. </span></li> <li><span style="font-weight: 400;"> State of Gujarat: petrochemicals, pharmaceuticals, and textiles. </span></li> <li><span style="font-weight: 400;"> State of Tamil Nadu: automobiles, textiles, and IT. </span></li> <li><span style="font-weight: 400;"> State of Karnataka: aerospace, biotechnology, and electronics. </span></li> <li>Union Territory of Delhi: automobiles, electronics, and textiles.</li> </ol> <p><span style="font-size: revert;">Table 1 below highlights the enormous populations and their distance from key international shipping ports, of the key manufacturing hubs. </span></p> <p><span style="font-weight: 400;"><img fetchpriority="high" decoding="async" class="aligncenter wp-image-8165 size-full" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%202772%20754'%3E%3C/svg%3E" alt="Indian Manufacturing Hubs" width="2772" height="754" data-lazy-srcset="https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM.png 2772w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-585x159.png 585w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-1200x326.png 1200w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-768x209.png 768w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-1536x418.png 1536w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-2048x557.png 2048w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-100x27.png 100w" data-lazy-sizes="(max-width: 2772px) 100vw, 2772px" data-lazy-src="https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM.png" /><noscript><img fetchpriority="high" decoding="async" class="aligncenter wp-image-8165 size-full" src="https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM.png" alt="Indian Manufacturing Hubs" width="2772" height="754" srcset="https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM.png 2772w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-585x159.png 585w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-1200x326.png 1200w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-768x209.png 768w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-1536x418.png 1536w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-2048x557.png 2048w, https://sourcify.com/wp-content/uploads/2024/12/Screenshot-2024-12-18-at-3.17.06 PM-100x27.png 100w" sizes="(max-width: 2772px) 100vw, 2772px" /></noscript></span></p> <p><span style="font-weight: 400;">In 2022, Indian exports to the US totaled US $83 billion. The top Three Exports from the US to India were </span></p> <ol> <li><b>Diamonds (US $9.75 billion): </b><span style="font-weight: 400;">In September 2024, the diamond and jewelry exports to the US reached US$812 million. Gajarat is the home of the cut and polished diamond trade. Manufacturers are spread throughout India. </span></li> <li><b>Packaged Pharmaceuticals & Medical Equipment (US $7.54 billion): </b><span style="font-weight: 400;">India’s high quality products compete with other global suppliers. The US imports various Indian medical supplies, such as surgical disposables, face masks, bandages, gauze, surgical caps, and sterile gloves. India is becoming a key supplier in the global healthcare industry. </span></li> <li><b> Refined Petroleum (US $4.87 billion). </b></li> </ol> <p><span style="font-weight: 400;">Another key export is the textiles and apparel category. In a category dwarfed by China, the value of US imports from India in 2022 was more than US $8.2 billion. This is primarily clothing and home textiles. </span></p> <h2><b>Government Support in India</b></h2> <p><span style="font-weight: 400;">Launched in 2014, the </span><b>“Make In India” </b><span style="font-weight: 400;">program aims to grow manufacturing’s share of the economy. Early partners were Japanese and German manufacturers. They guided Indian firms in setting up the manufacturing industries of today. Over the past ten years, the increase in manufacturing’s share of GDP has been modest. Despite this, foreign investment and the manufacturing sector are growing. The economic opportunity it presents remains strong. The factors that have hampered growth are being addressed. Reforms are underway to repeal and replace archaic laws to cut ‘red tape’ inefficiency. </span></p> <p><span style="font-weight: 400;">The Government’s latest program is the ‘Production Linked Incentive’ (PLI) Scheme. It has opened manufacturing across new industries. These include Pharmaceuticals, Food Processing Industries, Medical Appliances, and electronics. New entrants in the market include both Apple and Samsung. </span></p> <h2><b>Does India Have a Quality Problem? </b></h2> <p><span style="font-weight: 400;">There’s a perception that the output of Indian manufacturing industries is of low quality. If it’s cheap, it’s because of poor quality. Each of the big modern manufacturing economies suffered the</span></p> <p><span style="font-weight: 400;">same misperception. Japan’s initial manufactured goods were held to be of poor quality. So too were </span><span style="font-weight: 400;"> </span><span style="font-weight: 400;">Taiwan’s, then China’s, and now India’s. </span></p> <p><span style="font-weight: 400;">As each of these economies matured and invested in technology, skilled labor, and quality control, their reputation for quality improved. India is undergoing a similar transformation. Quality and innovation are critical enablers of their manufacturing growth. </span></p> <p><span style="font-weight: 400;">While there may still be instances of low-quality products, many Indian manufacturers now produce high-quality goods that compete with international brands. </span></p> <h2><b>Product Design and Development in India</b></h2> <p><span style="font-weight: 400;">If you have a unique product or design, securing Intellectual Property protection in India can be challenging. This is improving and is less difficult than in China where greater Government involvement in industry can complicate matters. Between the Indian and U.S. governments, the U.S.- India Trade Policy Forum’s Working Group on Intellectual Property has been taking steps to strengthen the enforcement of IP rights in India. </span></p> <p><span style="font-weight: 400;">If you are considering manufacturing a unique product, there are several considerations to keep in mind. These apply to manufacturers anywhere but are important when considering Indian manufacturers. </span></p> <ol> <li><b>Simplicity: </b><span style="font-weight: 400;">Design your product to be easy to make, assemble and repair. </span></li> <li><b>Components: </b><span style="font-weight: 400;">In-market sourcing of components will reduce your lead time and cost. </span></li> <li><b>Quality Control</b><span style="font-weight: 400;">: Work with your supplier to ensure quality control measures are in place at all critical points during the manufacturing process. </span></li> <li><b>Manufacturing Skill Set</b><span style="font-weight: 400;">: Ensure the manufacturer’s capability aligns with what is needed to manufacture your product to the quality standard your customer demands. </span></li> <li><b>Packaging</b><span style="font-weight: 400;">: Ensure your product’s packaging can cope with the demands of transportation from the factory gate to your destination in the US. Indian summer temperatures can be high and roads to ports, while improving, can be in poor condition. </span></li> </ol> <h2><b>Production MOQs and Quality Control in India</b></h2> <p><span style="font-weight: 400;">Minimum Order Quantities are a challenge to establish in any supply agreement in any market. MOQs vary depending on the complexity of your product, the MOQs of any unique raw materials required to be sourced by the manufacturer, and the manufacturer’s size. </span></p> <p><span style="font-weight: 400;">Manufacturers seek to maximize the MOQ to achieve economies of scale. The customer seeks to minimize the MOQ to reduce the cost of capital, transport, and inventory. Finding a compromise that works for you is key. </span></p> <p><span style="font-weight: 400;">Communication in English means the task of negotiating with potential manufacturers is easier. This frees you to focus on your negotiating strategy. A successful first strategy is to negotiate smaller up front MOQs with the promise to move to larger MOQs. This allows you to set up your supply chain, generate cash flow, and finance larger MOQs once your supply chain has been established. </span></p> <p><span style="font-weight: 400;">Alternatively, seek smaller manufacturers. They are more flexible in the size of their MOQs and ability to fulfill custom orders. The risk you face with a small manufacturer is the finished product’s quality. However, if you can secure the quality you need, negotiate a smaller initial MOQ, and then scale with them, you will form a long-term relationship based on trust. Together you can open doors to deeper collaboration in the future.</span></p> <p><span style="font-weight: 400;">Like any manufacturer in Europe, Japan, or the US, Indian manufacturers have adopted international quality standards like ISO 9001, ISO 14001, and others to improve their processes. Third-party inspectors are welcomed by manufacturers to verify product quality and compliance with standards. </span></p> <h2><b>Logistics and Shipping in India</b></h2> <p><span style="font-weight: 400;">Transit times from Indian ports to the US average 30 to 35 days to the West Coast, and 35 to 40 days to the East Coast. </span></p> <p><span style="font-weight: 400;">Imports valued above $800 attract a US Customs Duty upon arrival. Like any import into the USA, the </span><span style="font-weight: 400;"> </span><span style="font-weight: 400;">Harmonized Tariff Schedule or HTS code is needed to determine the duty payable. Customs and Border Patrol (CBP) uses an extended version of international HS codes — Harmonized Tariff Schedule of the United States Annotated (HTSUS). The code is used to identify the imported product. </span><span style="font-weight: 400;"> </span><span style="font-weight: 400;">The identity and origin determine the applicable duty. </span></p> <h2><strong>Challenges and Opportunities in Manufacturing in India</strong></h2> <p><span style="font-weight: 400;">Challenges and risks are intrinsic aspects of importing from any market. Pairing with reputable suppliers who have the same desire to establish a sound working relationship is key. Adverse exchange rates, weather, and economic events will make business more difficult. However, partners who work together will find mutually beneficial solutions. </span></p> <p><span style="font-weight: 400;">At this point, the shadow of additional tariffs isn’t being cast over India. There is a risk based on BRIC members (for which India is a foundation member) having recently discussed the option to move away from transactions in the US dollar to a third currency. Such a move is unlikely. </span></p> <p><span style="font-weight: 400;">There is a second risk to remember – the next Administration in Washington DC. The </span><span style="font-weight: 400;">simple </span><span style="font-weight: 400;">view of international trade is “</span><i><span style="font-weight: 400;">You’re either a winner, or a loser</span></i><span style="font-weight: 400;">”. If the US has a trade surplus with another nation, it wins. If it has a trade deficit, it loses. And if the US loses, it’s because the other side isn’t playing fair. The US imports more from India than India exports to the US. In September 2024 alone, US exports to India were USD $3.4 billion. Indian exports to the US were double that at USD $7 billion. This puts India on the winning side of Trump’s international trade ledger. It also puts India on his potential tariff target list of nations. </span></p> <p><span style="font-weight: 400;">Despite these two risks, the third way of assessing the challenges and risks of doing business in India is by observing the actions of larger corporations. Are they developing closer ties, or withdrawing in favor of other sources? Joining Apple and Samsung in deepening their sourcing relationship in India is Proctor & Gamble. The maker of the Gillette razor has moved to increase the use of cheaper Indian steel as part of its strategy to offset higher costs under the threat of tariffs. </span></p> <p><span style="font-weight: 400;">Infrastructure is attracting significant investment as part of the government’s push to increase Indian </span><span style="font-weight: 400;">manufacturing. This applies to roads, railways, ports, and airports. The key issue is congestion leading to capacity constraints slowing the planned growth of India’s manufacturing sector. </span></p> <h2><strong>Why India is a Manufacturing Leader</strong></h2> <p><span style="font-weight: 400;">While challenges persist, India’s potential as a <a href="https://sourcify.com/schedule/" target="_blank" rel="noopener">source of manufactured goods</a> is undeniable. As infrastructure and processes improve, it will become a more attractive destination for manufacturers. By staying informed of India’s evolving landscape, US businesses can capitalize on India’s growth and avoid the worst of proposed tariffs.</span></p> </div>  </div>  </main>  </div>  </div>  </div>  <div id="site-footer" class="site-footer"> <div class="footer-widgets"> <div class="footer-widgets-inner wrap"> <div class="footer-aside-wrap"> <aside data-width="3"> <div id="media_image-3" class="widget widget_media_image"><img width="300" height="81" src="data:image/svg+xml,%3Csvg%20xmlns='http://www.w3.org/2000/svg'%20viewBox='0%200%20300%2081'%3E%3C/svg%3E" class="image wp-image-593 attachment-medium size-medium" alt="" style="max-width: 100%; height: auto;" decoding="async" data-lazy-srcset="https://sourcify.com/wp-content/uploads/2017/12/logo-white-585x158.png 585w, https://sourcify.com/wp-content/uploads/2017/12/logo-white-768x207.png 768w, https://sourcify.com/wp-content/uploads/2017/12/logo-white-100x27.png 100w, https://sourcify.com/wp-content/uploads/2017/12/logo-white.png 962w" 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