India Targets Global Manufacturing Hub Status Beyond China+1
India aims to become a trusted global manufacturing partner, with engineering exports reaching US$122.43 billion in FY2025–26, a 4.86% increase from the prior fiscal year.
India's Manufacturing Ambition
India is positioning itself as a reliable global manufacturing partner, moving beyond the prevalent 'China+1' strategy, according to Farrokh N. Cooper of Cooper Corporation. Mr Cooper stated that the country can capitalise on its enhanced engineering capabilities, quality standards, technological advancements, and supplier networks.
The objective extends beyond simply attracting a portion of diversified production; it involves building India into a comprehensive manufacturing base capable of delivering innovation and scale across entire value chains.
This shift reflects a growing global confidence in India's industrial potential, with international firms increasingly viewing the country as a hub for both components and complete assemblies.
Shifting Global Production
The global production environment is undergoing a significant reorganisation. For decades, China served as the primary centre for manufacturing, supported by its vast industrial capacity and integrated supply chains.
However, recent disruptions, including the COVID-19 pandemic and geopolitical tensions, have prompted multinational companies to reconsider concentrating their production in a single location. This has led to the 'China+1' approach, where businesses establish additional manufacturing sites while maintaining operations in China.
India's large domestic market, skilled engineering workforce, and expanding infrastructure make it a key focus for this diversification. The Economic Survey 2025–26 estimated India contributed around 2.9% to global manufacturing gross value added and 1.8% to global merchandise exports in 2024.
Export Growth and Sectoral Breadth
India's engineering export performance underscores its increasing relevance in global manufacturing. Engineering exports reached an all-time high of US$122.43 billion in the fiscal year 2025–26. This figure represents a 4.86% increase from the US$116.75 billion recorded in the previous fiscal year.
Engineering products constituted 27.71% of India's total merchandise exports during FY2025–26. The country's manufacturing ecosystem spans diverse sectors, including automobiles, pharmaceuticals, electronics, defence, aerospace, renewable energy, and industrial equipment.
This broad industrial base and the growing sophistication of Indian engineering products indicate a solid foundation for deeper integration into global supply chains.
For Asian businesses, India's push to become a global manufacturing partner suggests a significant shift in supply chain architecture. Companies currently operating under a China+1 model may find expanded opportunities for sourcing and production within India, potentially reducing reliance on other regional hubs.
This could lead to increased foreign direct investment (FDI) into India's industrial parks and manufacturing zones, fostering greater competition among Asian economies for new production mandates.
Investors should observe India's policy developments aimed at enhancing manufacturing competitiveness, as these will influence capital flows and the long-term viability of new production bases across the region.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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