India will be the global hub and all countries are looking at India are the global manufacturing hub. Not only for components but the world is looking at us as hub manufacturing of assemblies as well. The companies are changing their business commodities not just expanding or increasing the capacities of components there are also diversifying the commodities as well.
The global manufacturing landscape is undergoing a structural transformation. For several decades, China emerged as the centre of global manufacturing, supported by its enormous industrial capacity, integrated supplier ecosystem, infrastructure and export orientation. Companies across industries built highly efficient supply chains around this manufacturing base. The disruptions of recent years, however, have encouraged global companies to reconsider the concentration of their manufacturing and sourcing activities in any single geography. The result has been the emergence of what is commonly described as the China+1 strategy, with companies looking to establish additional manufacturing and sourcing locations while retaining China as an important part of their global operations.
For India, this represents an opportunity of considerable scale. But I believe we need to look at the opportunity in broader terms. The objective should not simply be to become the next location to which companies move a portion of their production. Nor should success be measured only by the number of new factories established or the amount of foreign investment attracted. The larger opportunity is to build India into a trusted global manufacturing partner, capable of delivering quality, technology, reliability, innovation and scale across complete value chains.
That distinction is important because China+1 is not a permanent strategy. It is a response to changing business conditions. Companies will continue to evaluate manufacturing locations based on their ability to deliver the right combination of cost, quality, infrastructure, skills, technology, supply-chain resilience and market access. If India wants to benefit from this transition for the next decade and beyond, we must build capabilities that remain competitive even after the immediate China+1 momentum has passed.
China+1 Is Changing the Architecture of Global Supply Chains
The China+1 strategy emerged from several developments that have changed the way multinational companies assess supply-chain risk. The COVID-19 pandemic exposed vulnerabilities in highly concentrated supply chains, while geopolitical tensions, changing trade policies and rising costs in some manufacturing locations have encouraged companies to diversify production.
This does not mean that global companies are abandoning China. China remains deeply embedded in global manufacturing and possesses an industrial ecosystem that has been developed over several decades. The more significant change is that companies are increasingly asking whether they should have alternative manufacturing and sourcing capabilities in other markets.
India is one of the countries receiving greater attention because of its large domestic market, engineering capabilities, expanding infrastructure and growing manufacturing base. The Economic Survey 2025-26 estimates that India accounted for around 2.9% of global manufacturing gross value added and 1.8% of global merchandise exports in 2024. These numbers demonstrate both the progress that India has made and the scale of the opportunity that remains.
The question, therefore, is not whether India can attract a portion of the manufacturing activity that is being diversified globally. The question is whether India can develop the depth and reliability required to become a preferred manufacturing base in its own right.
India's Opportunity Goes Beyond China+1
India possesses several structural advantages that can support this transition. We have a large domestic market, a substantial engineering workforce, a growing network of component manufacturers and a manufacturing ecosystem that spans automobiles, engineering, pharmaceuticals, electronics, defence, aerospace, renewable energy, industrial equipment and other sectors.
India is emerging as a global manufacturing hub, with countries increasingly looking at India not just for component manufacturing but also for the manufacturing of complete assemblies. Companies are changing their business mix, moving beyond expanding production capacity for existing components to diversifying into new product categories and manufacturing segments. This shift reflects the growing global confidence in India as a manufacturing destination.
The country's engineering export performance provides evidence of the increasing international relevance of Indian manufacturing. Engineering exports reached an all-time high of US$122.43 billion in FY2025-26, compared with US$116.75 billion in the previous fiscal year, registering growth of 4.86%. Engineering products accounted for 27.71% of India's merchandise exports during the year.
This is significant because engineering exports are closely linked to manufacturing capability. The fact that Indian engineering companies are supplying increasingly sophisticated products to global markets indicates that the foundations for deeper global integration already exist.
However, India must now build on this foundation. The next stage should involve greater participation in global value chains, more domestic value addition, stronger supplier ecosystems and greater integration between Indian manufacturers and the engineering and product-development functions of global companies.
Make in India Must Move from Investment Attraction to Capability Creation
The first phase of Make in India was rightly focused on creating awareness about India's manufacturing potential and attracting investment. Foreign investment remains important because multinational companies bring capital, technology, global standards, management practices and access to international markets.
But investment alone does not create a deep manufacturing ecosystem.
A factory can be established relatively quickly. Building the network of suppliers, skilled workers, tooling companies, testing laboratories, logistics providers, engineering firms and technology partners required to support that factory takes considerably longer.
This is where the next phase of Make in India needs to focus.
We need to ask how much of the value chain can be developed within India, where it is economically and strategically appropriate. We need to encourage global companies to source more components locally, while simultaneously helping Indian suppliers achieve the quality and technical standards required by those global companies.
The objective should be to create an environment where an international manufacturer can establish a plant in India and progressively find more of the required ecosystem around it.
That is how a manufacturing location develops into a manufacturing hub.
From Capacity to Capability
India has added significant manufacturing capacity over the years. The next challenge is to deepen capability.
Capacity tells us how much we can produce. Capability tells us what we can produce, how consistently we can produce it, how quickly we can develop new products and how effectively we can solve complex manufacturing problems.
Global customers increasingly value the second.
A manufacturing partner needs to be capable of supporting product development, process engineering, tooling, testing, quality assurance, supply-chain management and continuous improvement. It needs engineers who can engage with international customers and understand not only what the customer wants manufactured, but why the product has been designed in a particular way.
This is especially important in sectors such as automotive, aerospace, defence, industrial equipment and energy, where product performance depends heavily on manufacturing precision and process control.
India therefore needs to move progressively from a production-led manufacturing model towards an engineering-led manufacturing model.
That transition will require investment in R&D, simulation, advanced manufacturing equipment, testing capabilities and skilled technical personnel. It will also require companies to build deeper relationships with customers rather than competing primarily on the basis of price.
Quality and Reliability will Determine Who Wins Global Trust
Cost can create an opportunity, but quality and reliability create trust.
This is one of the most important lessons India must internalise as it seeks to become a larger part of global manufacturing supply chains.
International customers need confidence that an Indian supplier will deliver the same quality today, next month and several years from now. They need confidence that delivery schedules will be maintained, that documentation will be accurate, that traceability will be available and that any quality issue will be identified and resolved quickly.
This requires a culture of manufacturing discipline.
Quality cannot simply be an inspection function at the end of the production line. It needs to be embedded in product design, process engineering, procurement, production, maintenance and logistics.
Technology can strengthen this process significantly. Digital quality systems, automated inspection, real-time process monitoring and data analytics can improve consistency and traceability. But technology must be supported by organisational discipline and an understanding that quality is everyone's responsibility.
If India wants to become a trusted global manufacturing partner, quality must become a reputation rather than simply a certification.
Trust has to be Built Across the Entire Ecosystem
Building trust in Indian manufacturing is not the responsibility of individual companies alone.
A global customer interacts with an entire ecosystem when it sources from a country. It considers infrastructure, logistics, customs processes, supplier capabilities, technical skills, regulatory systems and the reliability of supporting industries.
This means that the reputation of Indian manufacturing is collectively created.
A supplier that delivers high-quality products can still face difficulties if logistics are unreliable. A world-class factory can struggle if critical components cannot be sourced competitively. A highly skilled engineering team can be constrained if testing and certification facilities are unavailable.
India therefore needs to think of manufacturing competitiveness as an ecosystem rather than as the performance of individual companies.
Strengthening the Domestic Supply Chain
One of India's biggest opportunities lies in strengthening the domestic supplier ecosystem.
Large manufacturers cannot operate competitively without a strong network of component suppliers, tooling companies, material producers, maintenance providers, logistics companies and specialised engineering firms.
This is particularly important for MSMEs, which form a significant part of India's manufacturing base. These companies often possess deep technical expertise but may have limitations in access to capital, technology, testing facilities or specialised skills.
Helping MSMEs upgrade their capabilities can therefore have a multiplier effect across the manufacturing economy.
Supplier development programmes, shared technology centres, common testing facilities, digital manufacturing platforms and easier access to advanced machinery can help smaller manufacturers become integrated into global supply chains.
At the same time, localisation should not mean attempting to manufacture everything domestically irrespective of economic logic. A competitive manufacturing ecosystem must remain globally integrated. India should develop domestic capabilities where they provide strategic or economic value while continuing to participate in international supply chains where global sourcing makes sense.
The goal should be resilience and competitiveness, not isolation.
Industry 4.0 Can Help India Leapfrog
Technology provides India with an opportunity to accelerate this transformation.
Industry 4.0 technologies, including automation, robotics, industrial IoT, artificial intelligence, simulation and advanced analytics, can allow Indian manufacturers to improve productivity and quality while creating greater visibility across their operations.
For a country like India, this is particularly important because technology can help bridge some of the gaps created by differences in scale.
A smaller manufacturer with the right digital systems can monitor production, maintain traceability, analyse quality data and interact with customers in ways that were previously possible mainly for much larger organisations.
Artificial intelligence can support predictive maintenance, visual inspection, process optimisation and production planning. Simulation can reduce product-development cycles and optimise tooling and manufacturing processes. Connected systems can provide real-time visibility into production and supply chains.
But technology adoption needs to be purposeful. The objective should not be to create factories that are simply more automated. The objective should be to create factories that are more productive, more predictable and more responsive to customers.
Skills Will Determine Whether Technology Creates Value
Technology without skilled people will not create a competitive manufacturing ecosystem.
The workforce required by modern manufacturing is changing. Factories need people who understand automation, robotics, digital systems, data analytics and artificial intelligence while also possessing strong knowledge of traditional engineering and manufacturing processes.
India has a significant advantage in the size of its technical workforce, but we need to continuously update its capabilities.
Industrial training must become more closely connected with the technologies actually being used in factories. Apprenticeship programmes, industry-academia partnerships and structured reskilling initiatives can help bridge the gap between education and manufacturing requirements.
There is also an important role for experienced professionals. Manufacturing knowledge accumulated over decades should not be lost as technology changes. The future workforce should combine the practical knowledge of experienced engineers and technicians with the digital capabilities of younger professionals.
This combination can become a major competitive advantage for India.
Indigenous R&D Must Become a Larger Part of Make in India
If India wants to become a trusted global manufacturing partner rather than simply a production destination, indigenous research and development will be critical.
There is considerable value in adopting proven global technologies, but long-term competitiveness requires the ability to develop our own solutions.
Indigenous R&D can focus on products as well as manufacturing processes. It can involve developing new materials, improving component performance, reducing energy consumption, optimising manufacturing processes, developing advanced tooling or creating digital manufacturing solutions.
The objective should be to build intellectual and technological depth within the country.
This will also help Indian companies respond more effectively to customer requirements. A company with strong engineering and R&D capabilities can modify processes and develop solutions more quickly than a company that depends entirely on external technology.
The next generation of Make in India therefore needs to be accompanied by a stronger Make, Design and Innovate in India approach.
Export Competitiveness Must Be the Ultimate Measure
A manufacturing ecosystem should ultimately be judged by its ability to compete internationally.
Domestic demand provides scale, but exports provide an important test of quality, cost, technology and reliability.
India's engineering export performance demonstrates that our companies can compete globally. The record US$122.43 billion in engineering exports during FY2025-26 provides a strong base for further expansion.
The next step is to increase India's participation in global value chains and move towards higher-value products and services.
Indian manufacturers should aim to become long-term suppliers to global OEMs and Tier 1 companies rather than relying primarily on transactional orders. That requires investment in product development, quality systems, certifications, digital capabilities and customer engagement.
Exports should also be diversified across markets. Dependence on any one geography creates vulnerability to changes in tariffs, regulations, geopolitical developments or economic cycles.
A globally integrated Indian manufacturing sector should be capable of serving customers across North America, Europe, Asia, the Middle East and other markets.
Infrastructure and Logistics Remain Fundamental
Manufacturing competitiveness ultimately depends on the ability to move materials and products efficiently.
India has made significant progress in infrastructure and logistics. The World Bank's 2023 Logistics Performance Index ranked India 38th among 139 countries, improving from 44th in 2018. The World Bank has also highlighted the importance of road, rail, ports, freight corridors and multimodal connectivity in linking Indian manufacturers with global value chains.
Initiatives such as PM Gati Shakti and the National Logistics Policy are important steps towards building a more integrated logistics system.
However, manufacturing growth will require us to continue improving the reliability and cost efficiency of logistics.
A global customer does not evaluate a component only when it leaves the factory. The customer evaluates the complete journey from raw material to final delivery.
Faster ports, efficient customs processes, reliable road and rail connectivity, better warehousing and digital tracking can therefore directly influence India's attractiveness as a manufacturing destination.
Infrastructure is not simply an enabler of manufacturing. It is part of the manufacturing proposition itself.
Ease of Doing Business Must Continue to Improve
For global manufacturers making long-term investment decisions, policy predictability is extremely important.
Manufacturing investments are capital-intensive and typically involve long planning horizons. Companies need confidence that regulations will remain predictable, approvals will be timely and operating conditions will support long-term investment.
India has made progress in improving the business environment, but the next phase should focus increasingly on reducing the friction involved in operating a manufacturing business.
The objective should be simple: once a company has decided to manufacture in India, it should be able to establish, expand and operate its facility with minimal avoidable administrative complexity.
This is particularly important for MSMEs, which often have fewer resources to manage complex compliance requirements.
A predictable and efficient business environment will strengthen the impact of manufacturing incentives and infrastructure investments because it will make companies more willing to commit capital for the long term.
The Next Phase of Make in India
The next phase of Make in India should therefore be about depth rather than simply scale.
We need to move from attracting factories to building ecosystems around those factories. We need to move from production capacity to engineering capability. We need to move from supplying components to participating in product development. We need to move from adopting technology to developing technology. We need to move from competing primarily on cost to competing on quality, innovation and reliability.
Most importantly, we need to build trust.
A global customer should be able to look at an Indian manufacturing partner and have confidence that the company can deliver the required quality, at the required scale, with the required consistency and over the required period.
That confidence will not be created through a single policy or investment announcement. It will be built through thousands of successful customer relationships, reliable deliveries, continuous quality improvement, technological innovation and strong supplier partnerships.
From China+1 to India+1
China+1 should not be viewed merely as an opportunity for India to capture production that is being diversified away from China. It should be viewed as an opportunity to establish India as an independent pillar of global manufacturing.
That distinction matters because the long-term objective should not be to become the "plus one" in someone else's strategy. The objective should be to become a manufacturing partner that global companies choose because India offers a compelling combination of scale, engineering capability, quality, innovation, resilience and market opportunity.
India has already demonstrated that it can manufacture at scale. The next challenge is to demonstrate that it can manufacture with increasing technological depth and global consistency.
The opportunity is substantial. But it will require sustained investment by industry, continued infrastructure development by government, deeper engagement between academia and manufacturers, and a stronger focus on skills, R&D and supplier development.
The global manufacturing landscape is being reorganised. India has an opportunity to participate in that transformation at a scale that could influence the country's industrial trajectory for decades.
We should therefore look beyond the immediate China+1 opportunity.
The real ambition should be to build an India that global manufacturers do not choose simply because they need an alternative.
They choose India because they trust Indian manufacturing.
That is the standard we should aim for, and that is the next chapter of Make in India.
Farrokh N. Cooper is Chairman and Managing Director, Cooper Corporation Pvt. Ltd. Views expressed are the author's own.