New Delhi, July 7 : India is rapidly strengthening its position as one of the world's manufacturing destinations and is emerging as a major beneficiary of the ongoing realignment of global supply chains, according to a new ASSOCHAM study titled "Global Manufacturing Undergoing Strategic Realignment: India Emerges as a Key Beneficiary of Supply Chain Diversification."
The study highlights that the post-pandemic world has fundamentally reshaped global manufacturing dynamics. While China remains the world's largest manufacturing economy, new manufacturing investments and production capacity are increasingly being distributed across multiple economies as global firms adopt China+1, nearshoring and friendshoring strategies to build resilient and diversified supply chains.
The analysis, covering the world's ten largest manufacturing economies, which together account for nearly 65% of global manufacturing output, reveals that India has emerged as one of the "Emerging Manufacturing Leaders" by significantly improving its manufacturing performance relative to the global average in the post-pandemic period.
According to the report, India's average manufacturing growth rose from 3.44% in the pre-pandemic period to 4.15% in 2022-25, moving from below the global average to nearly two percentage points above the world benchmark. This remarkable improvement reflects India's growing competitiveness in the evolving global manufacturing landscape.
The analysis shows that before the pandemic, only China, Mexico and Russia recorded manufacturing growth above the global average. In the post-pandemic period, India joined the United States, France, Germany, Italy, and the United Kingdom in surpassing the global benchmark.
“The global manufacturing landscape is undergoing a gradual but important shift. Companies are no longer looking at efficiency alone; they are equally focused on resilience and diversification. India's improving manufacturing performance reflects the impact of sustained reforms and growing investor confidence”, said Mr Nirmal K Minda, President ASSOCHAM
The opportunity before us is significant, but the next phase should focus on implementation, scale and creating globally competitive manufacturing ecosystems that can make India a preferred partner in global value chains”, said Mr. Minda.
The report attributes India's rise to several structural strengths, including expanding domestic demand, robust infrastructure development, improved logistics, growing investor confidence under the China+1 strategy, and proactive government initiatives such as the Production Linked Incentive Schemes, industrial corridor development, PM Gati Shakti, and other manufacturing-focused reforms.
These initiatives have collectively enhanced India's appeal as a preferred destination for global manufacturing investment, said Mr Nirmal Minda
Looking ahead, ASSOCHAM believes India is well-positioned to consolidate its manufacturing leadership by accelerating logistics and industrial infrastructure, strengthening domestic supplier ecosystems, enhancing ease of doing business, promoting Industry 4.0 technologies, and leveraging Free Trade Agreements to integrate more deeply with global value chains.
The report concludes that with sustained policy support and continued structural reforms, India has the potential to transform from an emerging manufacturing destination into a globally competitive manufacturing powerhouse, playing a pivotal role in shaping the next phase of global industrial growth.
