As Covid-19 Disrupts Global Supply Chains, Will Companies Turn to India? America’s relationship with the two most populous countries in the world, China and India, is undergoing a stark, rapid and perhaps permanent transformation. ........ While the Facebook-Jio deal is largely digitally driven, we believe that 2020 could mark an inflection point in the bilateral trade of goods between the United States and India. ........ CEOs are confidentially asking their supply chain teams to develop additional sources that are completely independent of China. ....... In 2019, the United Stated imported a staggering $452 billion of goods from China. Only five low-cost countries have GDPs larger than that: India, Mexico, Indonesia, Brazil, and Thailand. India is the biggest economy among these candidates and has the largest untapped potential for filling part of the supply chain vacuum that is created by exodus from China. ....... “While U.S. companies are looking for alternatives to China, India becomes a natural destination. You have an English speaking workforce, highly skilled, the cost of labor is cheap and more important it is a growing market of 1.3 billion people whose disposable income is growing.” ......... a lot of top American companies have their biggest or second biggest bases in India. ........ The cabin of Marine One, the presidential helicopter is fabricated for Lockheed Martin’s Sikorsky unit in India, according to Aghi and he goes on to add “The Ford EcoSport is manufactured in Chennai, India for the U.S market.” NASA’s Jet Propulsion Laboratory in Pasadena, California is collaborating with the Indian Space Research Organization on the most expensive imaging satellite ever to be launched, NISAR. .......... India exports shrimp, processed foods, and agricultural products to the United States. Aghi says that 3.2 million Apple iPhones built in India will be exported from the country. Biswal of USIBC asserts that India can supply medical devices, energy efficient green transportation, power semiconductors, switches, and rectifiers for American needs. India already provides almost 40 percent of the generic drugs sold in the United States, produced at factories inspected and approved by the U.S. Food and Drug Administration. ...... We call this phenomenon “India Inside,” where much of what is imported from India goes unnoticed by both American consumers and the media, but is nonetheless crucial to the fabric of the U.S economy. ......... Indians love America and American culture but react strongly to what they perceive as American arrogance. ....... “Given amount of dependence on China, the only alternative country that can have the scale, the skills and the space to service American demand effectively is India.”
Understanding the Rise of Manufacturing in India India is the third-largest economy in purchasing power parity after the U.S. and China, it has a large population of engineers and factory workers, its intellectual property is widely respected, and it is easy to find English-speaking managers there. ....... Chicago-based Abbott, which operates in 150 countries and owns top brands such as Similac infant formula, recently built a manufacturing facility in Jhagadia, Gujarat, in order to compete in India’s large growing nutrition market. In 2014, its 14,000 employees in India generated $1.09 billion in sales. ......... “It is one of the fastest growing markets globally — with a young population, strong macroeconomic indicators, a huge consumption story, and a politically stable government working to accelerate reforms. For a healthcare company, the reasons to be part of this vibrant country are even more compelling — it’s an opportunity to serve the unmet healthcare needs of a 1.2 billion population.” ......... Another company planning to boost exports by manufacturing in India is GE. Among the 10 factories it has in the country, its new factory in the city of Pune serves as a global supply source for a number of its diverse businesses, from aviation and turbo machinery to wind turbines and diesel locomotives. ........ Former Texas Instruments engineer Lou Hutter, now CEO of the startup Cricket Semiconductor, is raising $1B dollars (largely from investors of Indian origin) to build India’s first analog chip fabrication (“fab”) facility. Hutter and his partners hope to be located in the middle-sized city of Indore in Madhya Pradesh, where the Chief Minister has offered free land and a stable supply of water and electricity. .......... Land ownership is often opaque, and re-zoning from agricultural to industrial use has been fraught with peril and delays. ....... Just two decades ago, most Western executives thought of Ireland or Central America as the place to outsource software and business processes; today, we believe that India’s knowledge worker base rivals those two destinations combined. We don’t expect Indian manufacturing to go head to head with factories in China, Japan, the United States, or Germany any time soon. But top executives who wish to diversify their supply chains should no longer only consider India as a supplier of software and call center services. Manufacturing is the next frontier in India, and companies such as Abbott, Cummins, and GE have already proven that the countries resources hold tremendous potential. ............ We believe that western CEOs should follow Jeff Immelt’s lead and begin including India as part of their global supply chain. ........ manufacturing is probably the only way to lift half a billion more of its population out of poverty
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