Indian Manufacturing Trails Behind Peers in Asia
"Despite many attempts at using policy measures to boost its manufacturing sector, India remains a minnow in global supply chains," according to Gavekal Research/Macrobond on X.com at @Gavekal. The Company further stated, "manufacturing as a share of GDP has stagnated below 15%, behind most other Asian countries at similar income levels". This is based on comparing Indian manufacturing as percent of GDP to Indonesia, China, Vietnam, Thailand, South Korea, Malaysia and Philippines, revealing manufacturing in India is struggling.
Looking at Indian electronics manufacturing industry, and compared to other Southeast Asian nations, India continues to struggle despite Apple making efforts to relocate its manufacturing supply chain from China to India. Electronics manufacturing decision-makers face a complex task of navigating the contract electronics manufacturing sourcing landscape in the sub-continent. The 'great shift' article below reveals some of the challenges and opportunities associated with moving a massive supply chain for a global enterprise, shedding light on the evolving Indian business and social structure, labor practices, and the need to address semiconductor manufacturing challenges.
India Lacks Private Sector Semiconductor Manufacturing
Following several failed attempts in recent years, India has not yet successfully established a private sector fabless semiconductor offering. This absence of a robust private sector presence in semiconductor manufacturing poses a significant challenge for any nation or region intent on building a comprehensive electronics industry ecosystem capable of meeting the global electronics supply chain design and manufacturing needs.
Semiconductor and components play a crucial role in the production of electronic devices, serving as the foundation for various component types and technologies. They are the building blocks that enable the functionality and performance of modern electronic devices. For a country like India to establish itself as a prominent player in global electronics manufacturing, having a strong semiconductor industry is imperative.
The absence of a private sector fabless semiconductor offering in India means the country heavily relies on public sector government and foreign semi-technology for its semiconductor manufacturing capabilities. While the Indian government's public sector's contributions are valuable, a thriving private sector presence is essential to foster innovation, competition, and rapid technological advancements.
What matters when formulating and executing contract electronics strategy? What is happening in industry, why are common practices different from best practices, and what does this mean for your firm?
I’ve spent 25+ years in contract electronics industry managing EMS divisions, setting up factories, running manufacturing operations and protecting profits. I’m an independent business analyst running a boutique management consulting firm. Mostly, this means working out what questions to ask.
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