The Manufacturing Sector: Growth Story of India

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CONCLUSIONS

Alternative destinations in the Southeast Asia and India presents a great opportunity for global manufacturers to diversify from a highly concentrated manufacturing base in China. These countries not only have geographical proximity to China but are also home to some of the world’s cheapest manufacturing resources globally. In addition, countries such as India offer a vast consumption market that is growing at the fastest pace globally. In the last one decade, since the augment of Make in India program in 2014, there have been a series of incentives directed at attracting manufacturing investments in the country. India currently has a government in the center that is pro-actively introducing policies that targets reducing the burden for manufacturers in terms of compliance procedures, approval timelines and other critical areas of concern. Along with these, there are signs of ecosystem improving for the sector. India has seen the biggest jump in Ease of Doing Business ranking by the World Bank as of last reading in 2020. Cushman & Wakefield’s Manufacturing Risk Index report of 2022 has put India amongst the top-most set of countries with greatest appeal to global manufacturers. Manufacturing sector thrives on good trade relations with other countries, and India has been working hard to cut across competing nations in fostering better trade ties. Challenges still exists in terms of high logistics costs, weak rank in contract enforcement and compliance burden, although many of these have been worked-upon diligently through forward-looking policies, and these should be mitigated to a great extent in the coming years. Real Estate sector has begun to witness benefits of the underlying growth in India’s manufacturing sector. In recent times, the Engineering and Manufacturing (E&M segment) has been second or third largest in terms of office leasing volumes across the top-8 real estate markets in India. Private Equity inflows into the industrial real estate sector has more than doubled when compared with pre-Covid (2019) years, and this is likely to continue given the positive investor sentiment here.

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Cushman & Wakefield

The Manufacturing Sector Growth Story of India

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