I ndia has long been known for its Himalayan peaks, the Taj Mahal, and Bollywood movies. More recently, it has attracted the interest of supply chain professionals. Many companies are exploring India as an additional supply chain hub, often prompted by a desire to diversify beyond China. Companies can access both a skilled workforce and a large and growing domestic market in India. In addition, government incentives and infrastructure projects demonstrate the country’s desire to attract investment. “The momentum in India is real, but the pace varies by sector and company readiness,” says Marcus McCray, associate partner with Clarkston Consulting. At the same time, establishing supply chain operations in India requires navigating an environment that can be daunting. Among other challenges, the logistics market in India accounts for about 13% to 14% of gross domestic product (GDP), compared to eight to 11% of
GDP in many more developed countries. A lower ratio indicates a more ef cient logistics environment, says Rupal Deshmukh, partner in the strategic operations practice at Kearney. Supply chain professionals can tackle these challenges with a solid strategy, strong and diverse supplier relationships, and local expertise. By operating effectively in India, companies can gain a competitive edge. MITIGATING RISK As of 2023, more than 90% of North American manufacturers report relocating some production away from China to other countries, including India, Mexico, and Turkey, nds a Boston Consulting Group survey. Their actions typically stem from concerns about a lack of transparency in China as well as the results of possible trade wars, and restrictions imposed by the Chinese government, among others, says Sunderesh S. Heragu, professor in the School of Industrial Engineering and Management at Oklahoma State University.
Many global companies are considering India as a supply chain hub for its skilled workforce and growing consumer markets. Cities such as Hyderabad oer government incentives to attract logistics investments.
March 2025 • Inbound Logistics 29
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