India manufacturing: Think China in the 1980s

Jefferson Clay
Director of global sales

After three years doing business over the phone and Zoom, our Cargo Services team is back on the road traveling to client sites and meeting with global partners. Late last year, I traveled to both India and Turkey. We wanted to learn more about India manufacturing and see what’s evolving in Turkey. Both regions are being discussed as growth markets for suppliers.

Here’s what I wanted to accomplish, and here’s what I gained from it.India manufacturing

India manufacturing has been talked about for a decade or more. It’s a new frontier for U.S. importers seeking to move business out of China. Seeing the area firsthand and having discussions with potential business partners in person was a first step to understanding the viability.

U.S. business professionals who have done business with Chinese suppliers for decades know massive manufacturing hubs have evolved over years. China shifted its economic philosophies in the late 70s and that opened the path to doing business in the country. India is what China was 30 to 40 years ago, relatively speaking. Many of our importers have begun to transact, or attempt to transact, business with India.

We believe as a company in traveling to our partner locations to do business face to face.  I met with several potential suppliers and learned about India’s manufacturing advantages. No tariffs and access to global traffic rank high. While I was there, the Chinese government announced it was easing COVID restrictions, and we all know the result, a COVID outbreak that disrupted business. In India, COVID is well managed without those severe restrictions we’ve seen in China. That means the economy is humming as people can go about their daily work.

Among the struggles, the owners of manufacturing facilities are trying to figure out how to work with American companies. It starts at the top with the Indian trade ministry supporting the initiative. And while most Indian business owners speak English, they still have some interesting phrases I heard and had to decipher. One I hear a lot was, “do the needful,” which means do what is necessary.  But China was the same 30 to 40 years ago.

The bottom line?  It’s a viable option, but it will take time to figure out manufacturers who are trustworthy and how their government processes will work. The good news is that as India is selling itself as a manufacturing hub. Top-tier brands, including Apple, are now looking at how to make it work lending credibility to the option.

I was able to spend one day in Turkey visiting Istanbul, which once was considered the center of the world because it was the end of the Silk Road trade route. I spent time with our primary logistics partner and key technology partner. Both companies are growing and vibrant. Turkey is a growing partner with the USA and has labor and raw materials and supplies some very key business sectors with product.

Turkey is second in growth to India in terms of where we’re seeing manufacturing and supplier growth. I observed modern business professionals who are in-tune with business management and processes. While the area is not as low in cost as India or China, it’s also not as full of hurdles and headaches. Governments are eager to work with companies to become part of their supply chains, evolve processes and develop partnerships.

Both options are viable yet remember, much like China in the 1980s and 1990s, it will take time and patience to identify trusted long-term manufacturers while adapting to the region’s government practices and processes. If you are looking for new supplier options, and our team is available to assist navigating based on our emerging partnerships, recent exploration and experiences.