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The News and Media Division of The Insight Partners
Saturday, 13 Jun 2020 08:00 pm

COVID-19 To make India The Next manufacturing Hub?

China is already at edge of losing some of its Japanese and the US manufacturing giants migrating from the country to India. For instance, Japan has in recent times allocated economic stimulus package of $2.2 billion to aid Japanese manufacturing firms to shift their production out of China owing to the disruption caused by coronavirus outbreak in their supply chains.


One thing that clearly can be predicted is China’s past two decades image of being a hardware base for the world will never be the same post pandemic as before. First half of the year 2020 is evident that the economic contagion that is spreading faster than COVID-19 has disrupted the entire supply chains affecting a huge number of businesses across the globe. And unlike always this time manufacturing disruptions are not caused by “tariff man” but the Chinese virus.

COVID- 19 that had started in Wuhan has shaken the entire world not only in terms of health but also in monetary terms. Thus, several developed economies are planning to move their multinational corporations from China to emerging economies like India. Moreover, according to certain sources Japan’s government has allocated economic stimulus package of $2.2 billion towards aiding Japanese giants to move from China. Moreover, some of these Japanese corporations include companies due to which China was known a manufacturing hub for decades.

Not only Japan but United States followed by South Korea is will also be moving their manufacturing corporations to India.

Why have these developed economic giants chosen India as their manufacturing base, when India for several years is known for its digital bits?

Although India’s has for long been known as a software hub to the globe, the country:

  • Is the third largest economy after the U.S. and China in purchasing power parity
  • It has a huge number of intellectuals and engineers that are extensively been valued
  • In India looking for fluent English-speaking human resource is very easy.

Despite of all the aforementioned benefits, there are certain challenges that require government’s attention like:

  • In India the process of changing residential or agricultural land into industrial land, that too when the country has a huge number of states having very lengthy and stringent government regulations. Thus, to solve this issue, governments from all Indian states need to implement an online portal that can replace the complex system making the process easy and smooth.
  • The country further has shortage of skilled labors, mainly because of its social mind block that the IT, Banking and government jobs are only best carrier options.  However, this problem will shortly be answered by already in action “Skill India” mission that has been designed for promoting skill based activities for poor and skilled youngsters at a very cost-effective rate.
Tags China India Manufacturing National security COVID-19 crisis Coronavirus pandemic Japan United States

Neha Pandey

Aware of her elements, Neha writes the best articles across industries including electronics & semiconductors, automotive & transportation and food & beverages. Being from the finance background she has the ability to understand the dynamics of every industry and analyze the news updates to form insightful articles. Neha is an energetic person interested in music, travel, and entertainment. Since past 5 years, she written extensively on sectors like technology, finance and healthcare.

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