Why Should International Manufacturers Outsource Their Operation to India?

For international manufacturers, outsourcing their operations to India comes with many benefits. India which is a service sector powerhouse is now aggressively building capacity across a host of industrial segments such as automotive, fashion & apparel, heavy engineering, defense and aviation, smartphone and electronics, consumer durables, FMCGs, packaged food, and much more. Not to mention diagnostic health care equipment, cements & building materials, pharmaceuticals, steel, technical textiles, and much more. 


The Indian government is also committed to transforming India into a major manufacturing power base by deepening its foothold in the global supply chain. Under the flagship of Make in India and Aatm Nirbhar Bharat, policy support is being provided to the manufacturing sector in the country. 


Lucrative PLI schemes have been provided across a range of sectors such as pharma, textile & MMF, smartphones, processed foods, and much more. Presently the percentage of manufacturing in the GDP is close to 17%, which India aims to tale to 25%. 

Already FDI in Indian manufacturing is growing fast. In the times to come, it will further proliferate. 


Mentioned below are a few reasons why international manufacturers should consider outsourcing their operations to India-


Budget-friendly: While we sum up the costs of hiring and retaining an employee overseas, the salary, technology, on boarding, and other benefits give a number that is quite over the budget. Whereas, when you plan to outsource the task to an emerging economy like India, you get to spend only 40% to 50% to get an employee on board, as compared to the ones hired in the US. This keeps your budgets in check, plus gives you more manpower that you require while also saving a lot.


Access to a Larger Talent Pool: India currently has a labour force population of about 500 million people, which makes the country an apt place to outsource manufacturing processes. Whereas in other countries, finding such talent is time-consuming and a hefty task, but not in India. Yearly, many fresh talents pass out with avid degrees that give an international giant hire fresh minds and prosper on their shoulders. Likewise, there is a large pool of skilled and semi-skilled workforce. 


Quality Standards: India is a country where hard work and dedication towards work are part of the job, and a wider culture. And when these factors are there, the quality of standards remains uncompromised. In fact, Indian professionals adhere to international standards with certifications like ISO and PCI. India’s higher standards are one of the reasons, large tech enterprises have outsourced their R&D functions to India. 


Lucrative Incentives: The GOI offers plenty of impetus to foster growth in the manufacturing sector. Besides lucrative PLI schemes, there are a host of other lucrative schemes available such as subsidies and reimbursements in land prices, subsidies & reimbursements in technology transfers, low or no customs duties in machinery imports, etc. Likewise, across numerous provinces in India dedicated business parks and industrial clusters have been developed with common facilities and infrastructure support. 


India is Aggressively Building Infrastructure:  By 2025, India aims to invest USD 1.4 trillion to develop a word class infrastructure. Already projects worth USD ~ 700 billion is under construction. India is aggressively investing in airports, air cargos, logistics & warehouses, ports, freight railway corridors, roadways, urban transit systems, etc.  


All these factors make India the best place to outsource your business.

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