As a consequence of the recent pandemic, the global manufacturing market is exceedingly disrupted and still recovering from its negative impact. Lockdown impositions, supply chain disturbances, rising labor costs, and the decreased workforce across sites enormously hindered the ability to manufacture and supply goods. However, the Indian engineering or manufacturing sector saw a surge in export performance even during the challenging times and entered the pool of its untapped potential. The engineering goods exports stood at $ 9.38 billion in October 2021, registering 28% growth over $ 6.2 billion in the same month last year.
India is an emerging Manufacturing Destination globally and holds the 2nd Position after China for the most advantageous location for global manufacturing and effectively surpasses the USA this year (2021) as per Cushman & Wakefield’s Global Manufacturing Risk Index 2021 report. (Source)
Now, let’s dive deeper into the top reasons making India a preferred destination for sourcing engineering goods.
Top Reasons for Buying Engineering Goods from India
Low-cost sourcing remains the topmost strategy for businesses worldwide to increase the gross profit margins. Moreover, as consumer demands are staggering at a high pace, many companies are incorporating sourcing as a reliable tactic to overcome the challenge of unmet needs. Indian supply market has arisen as the competent and dependable choice before the global market. Competitive pricing, lower labor costs, a vast pool of skilled workforce, conducive regulatory framework, manufacturing potential across different industry verticals, including steel, pharma, agrochemicals, defense, etc., makes India ahead of the global competition for sourcing engineering goods. The government initiatives like Make in India 2.0, Self-reliant India Campaign (Atmanirbhar Bharat) are fueling the growth of India’s manufacturing sector to evolve as a premier sourcing destination globally. To know more about how global markets can leverage the Indian supply market for their win, read our earlier blog post!
Economical Buying Solutions for Sourcing Engineering Goods from India
With a focus on providing 360-degree sourcing solutions in-house, combined with innovations, quality assurance, and low-cost sourcing, the Indian supplier base has set a unique selling point in the global supply market. Below are a few pointers that further aids in the cost-effective sourcing of engineering goods from India.
- Skillset and Competencies: Indian suppliers hold immense potential in manufacturing and sourcing simple and complex equipment. It’s not rare to find suppliers proficient in extending services that combine fabrication, machining, and handling of voluminous job/equipment, which is comparatively cost-effective. The availability of suppliers with a distinctive skill set and management capability of the overall supply process adds to the country’s competitiveness in the global supply market.
- Supportive Government Policies: The recently introduced PLI schemes will improve the productivity of Indian companies in the mobile, electronics, and pharmaceutical sectors as it encourages incremental production, which is poised to benefit exports and broaden India’s reach to global sourcing market. Further, the Government of India has invigorated export incentives and cleared some tax refund checks, set to provide a much-needed financial boost to exporters to widen their reach globally. Moreover, the government is proactively looking into the challenges involved in sourcing from India and retaliating against them.
- Additional Factors: The lower labor cost is one of the most benefitting factors when considering sourcing from India. For instance, the average minimum wage for contract workers in India is US$148 per month (Rs 10,000) and US$234 in China. Apart from labor costs, the benefits are extended to transportation, raw materials, manufacturing, etc.
How to Get the Most Out of Sourcing From India?
The Indian market is dominated by small-scale factories that focus on a range of niche skills. As such, the process of sourcing products from India may seem intimidating, but it is rewarding due to the unique products one can receive in exchange for their investments. To capitalize on sourcing from India, buyers need to invest wisely and build long-term partnerships with industrial entities that will make the experience positive overall. Various sourcing companies in India can help buyers with cost-competitive sourcing and procurement. We have compiled a step-by-step approach for further information to assist you with sourcing from India. Read here!
How Can ESSNPS Benefit You?
Our quality sourcing services unite buyers and suppliers to generate collective impact and benefits. We help buyers find vendors best suited to their different needs within various industry verticals. Further, our quality assurance engineers ensure the sustainability of your competitive advantages across the supply chain when ordering, fabricating, and delivering. To avail of sourcing services from India, you can email us at: email@example.com, and our team shall be happy to assist you!