Manufacturing Momentum Meets Structural Challenges
As global manufacturers continue to diversify away from China, the question looming large in 2025 is: Can India truly take its place as the next global production powerhouse? The answer is… evolving — with signs of both promise and complexity.
India’s Moment in the Spotlight
Since 2022, India has aggressively positioned itself through its “Make in India 2.0” initiative, combined with Production-Linked Incentive (PLI) schemes targeting semiconductors, electronics, and solar modules. Apple, for example, now assembles over 25% of its iPhones in India, and Tesla recently announced a gigafactory in Gujarat slated to begin production in late 2025.
The Talent is There — But So Are the Bottlenecks
With a young, tech-savvy labor force and rising engineering graduates, India appears well-suited for scaled manufacturing. However, logistics inefficiencies, bureaucratic red tape, and inconsistent power supply still slow progress.
Freight turnaround times in Indian ports remain 30–40% longer than in China or Vietnam. While expressway infrastructure is expanding, inland logistics still suffer from fragmentation and outdated warehousing systems.
Shifting Roles in Global Supply Chains
Rather than fully replacing China, India is increasingly becoming part of a “multi-node” global factory model. In this model:
Design and high-end components stay in Korea or Germany.
Mid-range assembly moves to India.
Final packaging or last-mile customization is done in Eastern Europe or Africa.
This modular supply chain approach allows flexibility — and India is becoming the preferred node for mid-tier electronics, textiles, and electric vehicle components.
Geopolitical Tailwinds
India’s rising trade and security alignment with the U.S., Japan, and EU provides a favorable climate for long-term investment. The recently signed India–EU Trade Corridor aims to enhance maritime and rail links between Mumbai and Europe via the Middle East, accelerating component mobility and export potential.
Key Takeaway
India isn’t replacing China — it’s redefining its own role in the global industrial landscape. With targeted reforms and sustained infrastructure upgrades, it could very well anchor the next decade’s manufacturing realignment.