HOW SOURCING FROM INDIA CAN BENEFIT FOREIGN BUSINESSES

Sourcing From India

After the Covid-19 pandemic, there has been a massive shift in the global supply chain scenario. Companies that used to source their products from overseas markets began looking for alternatives to bridge supply gaps. In this regard, India emerged as a viable alternative.

Due to its vast consumer market, developing infrastructure, and expanding logistics sector, sourcing from the Indian market has become the preferred choice among foreign firms

Why is Sourcing from India Beneficial for Foreign Companies?

Foreign organizations can get multiple benefits by sourcing from the Indian market. Some of them are as follows:

• Availability of Skilled Workforce

A large portion of the Indian population consists of youth, who have high technical expertise. Thus, there is the availability of a skilled workforce, which can provide a high level of flexibility and cost efficiency. This enables manufacturers to leverage different technology which can enhance and scale their production process.

• Favorable Government Policies

The Indian Government has introduced several policies which enable manufacturers to scale their business. For example, the “Make in India” initiative aims to promote innovation and investment in order to create state-of-the-art infrastructure. It was also an initiative by the government to encourage businesses to manufacture products locally.

• Trade Agreements with Several Nations

India has Free Trade Agreements (FTAs) with over 13 nations. This facilitates cross-border import and export with reduced or no government tariffs, prohibitions, subsidies, or quotas. The following countries /regions enjoy trade agreements with India:

1. India-Sri-Lanka free trade agreement
2. the agreement on the South Asian Free Trade Area (SAFTA)
3. India-Nepal Treaty of Trade
4. India-Bhutan agreement on trade, commerce, and transit
5. India-South Korea Comprehensive Economic Partnership Agreement (CEPA)
6. India-Japan CEPA

• Strategic Location

The Indian subcontinent is located at the head of the Indian Ocean. This sets the country at the center of the trans-Indian Ocean routes, which facilitates a connection with both East Asian and Western nations.

Thus, foreign businesses planning to conduct product sourcing in India can get their goods shipped to any part of the world with ease. However, to facilitate it, partnering with the right vendor development services provider is a must.

• The Vast availability of Raw Materials

In India, there are vast reserves of natural resources. Thus, most of the essential raw materials like metals, wood, cotton, jute, silk, etc. are readily available. This enables manufacturers to reduce their production costs and offer their end products at competitive rates.

• Low Labor Costs

Thanks to its growing population, India has ample labor resources. Thus, in comparison to other developed nations, the labor costs are low. This serves as a huge benefit for suppliers as they can manufacture products at lower prices. As a result, foreign companies can sustainably source products from this market to sell them in their target areas.