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Every global company want to reduce their cost and fully optimize all their resources, but now the worldwide market has changed too much, especially after Covid 19; we can notice a massive shift in the supply chain as many companies started to fill the supply gaps and try to reduce it considerably, and in this situation, India came as a savior. India is not only a place of vast and diverse culture, but it is also one of the major resources in offering goods and services worldwide due to constantly developing infrastructure, low-cost raw materials, expanding logistic sector, and technological advancement. For every business dealing in physical goods, product quality, and higher profit margin matter greatly to survive in the long run. Besides offering supreme-quality goods, and reducing direct and indirect costs for many foreign businesses, choosing India for product sourcing gives them a competitive advantage in capturing the large helm of the local market. Additionally, India is a powerhouse of sourcing and has a lot in its land to offer. In this blog, we will go deep into why product sourcing from India is the choice of many multinational corporations worldwide.

Factors encouraging foreign companies to select India as their source for product procurement services

Easy Availability Of Raw Materials

Since 1869, India has been the exporter of primary products for many developed and developing countries around the world because raw materials are easily attainable in India, primarily due to the nation’s natural resources ranging from fertile agricultural land to rich mineral & metal deposits (like aluminum, copper, and bauxite), lush forests, and a wealth of marine resources. Thus, this allows foreign companies sourcing products from India to gain significantly from the nation’s abundant and diverse raw material reservoirs. In the case of custom manufacturing, it becomes very profitable due to low production costs; whether it’s related to minerals for heavy industry, agricultural products for food processing, or timber for construction, India’s resource wealth caters to a wide spectrum of manufacturing needs. Additionally, according to data from Volza Grow Global, most of India’s raw materials are exported to Bangladesh, Vietnam, and Pakistan, and thus, India secures the place of 3rd largest exporter in the world after China and Japan.

Access To Skilled Workforce

India is the house of one of the world’s largest and youngest populations, predominantly composed of its dynamic youth, many of whom possess invaluable creative & technical expertise and hold various academic, and non-academic degrees. Consequently, India offers a vast pool of skilled workers, facilitating a remarkable degree of flexibility and cost-effectiveness for businesses. This advantageous workforce composition allows manufacturers to harness diverse technologies to streamline and expand their production processes. In addition to this, the Indian workforce covers a broad spectrum of industries and professions that enable companies to tap into specialized talent pools, ensuring a well-rounded and adaptable workforce. Moreover, nowadays, the Indian government are supporting their youth by actively promoting skill development programs and vocational training to further enhance their capabilities, which later on works as an asset for numerous companies and organization that would even allow small & medium companies to supply first-rate products to foreign individuals, retailers, and wholesalers.

Government Support & Favourable Policies

The Department of Commerce is entrusted with formulating and implementing foreign trade policies, and the Indian government has also established Export Promotion Councils (EPCs) to support and facilitate export activities. Besides this, by introducing a series of well-thought-out policies, the Indian government plays an important role in the manufacturing sector of India. “Make in India” is one such visionary initiative that aims to improve the business environment in India as well as to encourage companies to manufacture, assemble, and develop products in India, thereby stimulating business growth and expanding India’s research and development capabilities. However, the “Make in India” initiative is a smaller part of a broader strategy. Additionally, India’s FTP (Foreign Trade Policy) 2023 facilitates exports and other documentary compliances related to foreign trade, also FTP 2023 has 4 main pillars:
  • Incentive to Remission
  • Export promotion through collaboration
  • Ease of doing business,
  • Emerging Areas.
Plus, the FTP is now extending to e-commerce exports, which are projected to reach between USD 200 billion and USD 300 billion by 2030. Furthermore, the updated FTP aims to elevate the Indian rupee to a global currency status, enabling international trade settlements in the domestic currency.

Strategically Located Shipping Ports Enhancing Global Trade Opportunities for Europe and Southeast Asia

India’s remarkable geographical positioning is a valuable asset for international businesses seeking to expand their horizons as the country is connected to major global destinations through a comprehensive transportation network, and its expansive 7,500-kilometer coastline is a demonstration of its strategic advantage. Comprising 13 major seaports and complemented by 10 international airports, India’s infrastructure links it to nearly every corner of the world, extending over approximately 55 countries. This robust infrastructure backbone is pivotal in driving growth across the manufacturing and service sectors. Plus, choosing India for product sourcing provides foreign enterprises with a streamlined pathway to import their products manufactured within India to customers worldwide, thereby strengthening supply chain resilience. However, to get the products shipped to any country of the world, it is essential to partner with the right product sourcing and custom development company in India.

Economical Labor cost

Labor costs in India stand out as a distinct advantage when compared to other countries. This cost advantage has made product sourcing from India a perfect option for businesses that prioritize cost efficiency, want to stand out in a fiercely competitive market by positioning more monetary resources in other departments of the company, and desire higher profit margins. The nation’s labor market consistently offers a competitive environment that can substantially benefit companies with a keen eye on cost management. One of the main reasons for India’s low labor cost is the abundant availability of skilled labor at comparatively lower wage rates. India’s vast workforce is not only numerically impressive but also boasts a diverse skill set. Thus, companies can utilize human resources more without stretching their budgets to the limit. We can say choosing India for product sourcing comes as a unique blend of quality and affordability that renders India an attractive destination for businesses looking to optimize their production costs. Moreover, it is significant for foreign companies to understand the labor structure in India and the laws regulating the Indian labor workforce.

Advancements in technology in relation to logistics and supply chain management

India’s transportation sector has been progressively reshaping logistics and supply chain management for the past few years. In 2022, the Indian logistics market boasted a substantial size, totaling approximately 274 billion U.S. dollars. Projections indicated a robust trajectory, with expectations that this market would expand significantly, reaching approx. 563 billion dollars by the year 2030. This growth was anticipated to occur at an impressive compound annual growth rate (CAGR) of 9.4%. One notable aspect of India’s logistics market is its comparatively higher logistics cost, which is 14% of GDP. In contrast, this figure exceeded the average logistics cost of GDP among BRICS nations, which averaged at a slightly lower 11 percent. This distinction highlights the potential for optimization and cost-efficiency improvements within India’s logistics sector. This transformation in the logistics landscape is driven by a strategic focus on achieving comprehensive visibility throughout the entire consignment journey. Real-time tracking of shipments, intelligent route optimization, and other cutting-edge technologies are becoming the norm. Such advancements are not only enhancing operational efficiency but also bolstering the resilience of India’s supply chain, as a consequence, become a reason for choosing India for product sourcing requirements mainly because companies worldwide are increasingly drawn to India’s evolving logistics ecosystem, plus there is more promising growth prospects that lie ahead.

Wrapping Up

In conclusion, choosing India for product sourcing offers numerous advantages over other countries; in addition to the above-mentioned points, there are many more benefits that a multinational company can opt for product sourcing service provider by understanding the trade laws, legal and illegal products, taxation, government policies, technology, labor force, and more. If you are an individual, wholesaler, or any small or large company in any corner of the world and want to choose India for product sourcing, then let PGIN Export help you in obtaining the best in class products from the top manufacturers of India, besides this, we can also assist you in custom development of your desired goods to fulfill the needs of your customer base. Just visit the PGIN Export Contact Us page or give us a call at – +91 7777881111
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