According to real estate consultant Cushman & Wakefield, India has surpassed the United States(US) to become the world’s second-most sought-after manufacturing hub, owing primarily to cost competitiveness. China remains the most advantageous site for global manufacturing among 47 countries in Europe, the Americas, and Asia-Pacific, according to the consultant’s 2021 Global Manufacturing Risk Index (APAC).
“India takes the second spot after China as the most sought-after manufacturing destination globally,” Cushman & Wakefield said in a statement. Following the United States are Canada, the Czech Republic, Indonesia, Lithuania, Thailand, Malaysia, and Poland.
The United States was ranked second in last year’s survey, while India was ranked third. This, according to the consultant, demonstrates businesses’ rising interest in India as a preferred manufacturing hub over other countries, such as the United States and those in the Asia-Pacific area.
“The growing focus on India can be attributed to India’s operating conditions and cost competitiveness. Also, the country’s proven success in meeting outsourcing requirements has led to an increase in the ranking year-on-year,” the statement said.
Parameters for the rankings
The report’s rankings are based on four main parameters: the country’s potential to restart manufacturing, the business climate (talent/labor availability, market access), operating costs, and the dangers (political, economic, and environmental). The operating environment and cost-effectiveness of a country are used to calculate the baseline ranking for top manufacturing destinations.
Cost scenario ranking
In terms of the cost scenario ranking, India remained in third place, as it did last year, while Vietnam moved to fourth place from third.
“Despite being among the top three countries in the baseline and cost scenario rankings, there is a long road for India to traverse when it comes to areas like managing the geopolitical risks involved in running a business and its ability to restart its manufacturing business after a devastating second wave of the Covid-19 virus,” Cushman said.