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Every industry irrespective of size proactively looks for opportunities to reduce production costs and expand its gross profit margins. For this reason, sourcing and procurement services have gained momentum in recent years. However, apart from lower costs, various other factors such as availability of raw materials, workforce, language, ethics, government policies, etc. greatly impact supply chains. Considering all these aspects, the Indian supply market has gained popularity as one of the leading sourcing destinations for many businesses across the globe.
India is the sixth-largest economy globally. The burgeoning competitiveness and the country’s manufacturing capabilities are driving the attention of buyers for sourcing engineering goods. India’s inherent strengths in manufacturing a wide array of parts from different industry verticals like- automotive, defense, aerospace, packaging, oil and gas, food and beverages, pharmaceuticals, etc. add to India’s competency as a preferred sourcing destination.
Moreover, post-pandemic, various businesses are facing supply chain disruption which can be mitigated by exploring services in the Indian market. Whether looking for contract equipment manufacturing, highly complex parts manufacturing, or components for assembly operations, etc. Indian supply market holds all the capabilities and expertise to cater to your operational needs. From quality assurance, large domestic market, logistics coordination, reduced cost of materials, to proactive policies under Atmanirbhar Bharat, etc. India is emerging as a premier sourcing destination.
Below are some of the compelling facts to help understand the potential of India for sourcing engineering goods.
• According to EEPC: India’s engineering goods exports continued the uptrend and posted a 52.61 percent increase in June 2021. And is expected to grow exponentially in the coming years.
• The $49 bn (FY20) Auto Components industry in India is expected to grow to $200 bn by 2026. USA, Germany, UK, Thailand, and Italy are the top destinations for exports. (Source)
• Favorable Trade Policy: 100% FDI allowed and conditional restrictions on import-export. (Source)
• PLI schemes in automobile and auto component sector with financial outlay of INR 57,042 crores introduced under Atmanirbhar Bharat/ Self-reliant India Campaign 3.0. (Source)
Indian suppliers are witnessing an upsurge in the global sourcing market for various reasons. The advantages offered by Indian sourcing are effectively helping industries to increase growth, lower costs and become more competitive in the market. Following are some of the benefits enjoyed by buyers from Indian sourcing:
• Access to cheap and different variety of raw material
Indian territory has an abundance of a variety of metals- iron, aluminum, brass copper, etc., non-metallic organic materials, forest products, natural fibers, and oils, etc. at comparatively cheaper rates. By sourcing manufacturing raw materials from India, companies can significantly reduce the costs involved in production.
• Maintained quality standards
Quality is one of the key components in sourcing and procurement services. Most manufacturing industries in India have Japanese machinery installed, that helps remarkably increase the production standards. Indian industries are well equipped with quality control department and possess capability of complying to internationally accepted quality standards.
For instance: At ESSNPS, we have engineers qualified and certified by ASNT Level II, a quality standard developed by the American Society for non-destructive testing. Apart from this, our sourcing procedure includes final inspection, pre-shipment checks, stage inspection of parts, etc. to ensure quality product delivery.
• Skilled human resource
67% of India’s population belongs to the age group of 15-64 years, making it a potent powerhouse for manufacturing backed with expertise of highly experienced engineers and freshly graduates bringing in innovative perspectives. Each year India produces more than 10 lakhs of engineering graduates in various disciplines. Moreover, India is the second-largest English-speaking country in the world after the US, subtracting the language barriers in sourcing operations.
• Cost advantages
The higher the costs, the lesser the profit margin becomes. Costs play a vital role in boosting a business’s efficiency. Transport cost, labor cost, and other associated costs need to be closely checked when making sourcing decisions. In comparison to other countries, India has the competitive advantage of lower costs in terms of labor, transport, manufacturing, raw materials, etc.
• Reliable and flexible nature of businesses
It is one of the most unique advantages that sets India apart from other countries. Participatory work culture, transparency in work, effective organization, and adaptability to buyer’s needs, Indian suppliers and manufacturers possess all these traits to ensure sustainable relationships with its customers.
Sourcing in India can undeniably create a lot of opportunities for businesses to prosper. But it demands the investment of time and effort for locating a competent supplier to fully take the advantage of sourcing services from India. This is where ESSNPS steps in to help you!
ESSNPS: A Leading Provider of Industrial Sourcing Services
ESSNPS is a global industrial sourcing and procurement service provider located in India. Since its inception in 2005, we have developed a reliable vendor base, capable of delivering high-quality engineering equipment. Our vertical industry expertise and professional approach backed with strategic solutions ascertain seamless supply chain management to garner impeccable results for our customers.
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