- In the Global Manufacturing Risk Index 2021, India became the second most sought-after manufacturing destination globally, driven mainly by cost competitiveness.
- India ranked second in the Global Manufacturing Risk Index 2021 by taking over the USA which now ranked third.
- In last year’s report, the US was in the second position while India ranked third.
- In terms of cost scenario ranking, India continued to retain the third spot like last year, while Vietnam is pushed to the fourth position from the third.
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Key Points about Global Manufacturing Risk Index
- About Global Manufacturing Risk Index: It is released by the US-based property consultant Cushman & Wakefield.
- It assesses the most advantageous locations for global manufacturing among 47 countries in Europe, the Americas, and Asia-Pacific (APAC).
- The baseline ranking for top manufacturing destinations is determined on the basis of a country’s operating conditions and cost-effectiveness.
- Key Parameters used for Ranking: Global Manufacturing Risk Index uses four key parameters for determining the ranking of a country. They are-
- Country’s capability to restart manufacturing,
- Business environment (availability of talent/labour, access to markets),
- Operating costs,
- Risks (political, economic, and environmental).
Key Findings of the Global Manufacturing Risk Index 2021
- China is the most sought-after manufacturing destination globally, ranking first in the Global Manufacturing Risk Index 2021.
- The US ranked in the third position, followed by Canada, Czech Republic, Indonesia, Lithuania, Thailand, Malaysia, and Poland.
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Significance of improved ranking in the Global Manufacturing Risk Index
- The improvement in ranking indicates the growing interest shown by manufacturers in India as a preferred manufacturing hub over other countries, including the US and those in the APAC region.
Key reasons for Improved Ranking in the Global Manufacturing Risk Index
- India’s operating conditions and cost competitiveness: is the main reason for its attractiveness to global manufacturers.
- India’s proven success in meeting outsourcing requirements has also led to an increase in the ranking year on year.
- US-China trade tensions: resulting in plant relocations from China to other parts of Asia due to an already established base in pharma, chemicals, and engineering sectors.
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Scope for Improvement for India in the Global Manufacturing Risk Index
- There is a lot of scope for improvement for India in areas like-
- Managing the geopolitical risks involved in running the business.
- Ability to restart its manufacturing business after a devastating second wave of the COVID-19 virus.