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India’s Standing in the Emerging Asia Manufacturing Index 2024

In the inaugural edition of the Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”) published by Dezan Shira & Associates, India is identified as among the leading manufacturing destinations in Asia. The report assesses the performance of eight emerging economies in Asia—China, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, India, and Bangladesh—across key parameters including international trade, tax policies, business environment, and more.

About the EAMI report

The objective of the EAMI 2024 is to evaluate the growth risks and assess the comparative potential of emerging economies in Asia in terms of their appeal as a manufacturing base.

There are 48 different parameters considered by the report, which are grouped under eight core criteria: the economy, political risk, business climate, international trade, tax policy, infrastructure, workforce, and innovation.

India’s leading performance indicators: EAMI 2024

Of the eight indicators, India is a star performer on three tiers i.e., namely the workforce, economy, and business environment.


India has emerged as a major economic force in the global arena, demonstrating consistent strength. According to the Ministry of Statistics and Programme Implementation, India’s economy, ranked third largest in Asia, grew by 8.4 percent in the third quarter of FY 2023-24.

While Indonesia claimed the top position in this tier in the EAMI 2024 report, India secured second place primarily due to its robust economic expansion. Despite significant global challenges such as disruptions in supply chains due to geopolitical tensions, tightening of global monetary policies, and inflationary pressures, India’s economy thrived. Strong investment activity, driven by government initiatives in infrastructure and buoyant private consumption, bolstered its position.

India’s real GDP grew by 7.6 percent in FY24 per government data. Double-digit growth in the construction sector, fueled by robust demand for residential projects, contributed significantly. Both the manufacturing and service sectors also experienced growth in Q3 of FY24.

Business environment

The indicator has further sub-indicators to provide insights into the specific restrictions, regulatory framework, and operational conditions within an economy. India stands out with the lowest required capital to set up a company.

While there is no stipulated minimum capital requirement in India, the EAMI 2024 report assessment notes that companies have successfully undergone business incorporation in the region with as little as USUS$1,000. This flexibility underscores the accommodating nature of India’s regulatory environment, allowing for a streamlined entry for businesses with varying capital capacities.

Labor costs

India has the lowest minimum wage among the countries examined, yet it also boasts one of the highest average earnings. The Minimum Wages Act of 1948, which led to varying minimum wages across different regions of India, resulted in one of the nation’s lowest minimum wage scales, despite the absence of a standardized national minimum wage. In places like Bihar, for instance, the minimum wage can be as low as INR 160 (US$1.93) per day.

Despite this relatively low minimum wage, India’s average salary remains significantly higher than that of many other countries. The substantial wage gap prevalent in key sectors such as engineering, banking, and IT largely accounts for this disparity.


Political stability

The EAMI 2024 report ranks India 6th on the political stability indicator. The poor ranking has been estimated based on political stability, corruption index, and travel risk.

However, one may note, that the country has had a stable government at the federal level for over a decade, with Prime Minister Narendra Modi’s government taking charge for its third consecutive term as of June 6, 2024.

India’s 18th general elections concluded in June wherein PM Modi’s National Democratic Alliance (NDA) formed a majority coalition in the Parliament. Key cabinet portfolios also indicated a policy continuity from previous administrations, indicating to investors that the government would continue to implement its flagship reforms and pro-business agenda.

In terms of the corruption index, India ranked 93 out of 180 countries on the corruption perceptions index (CPI) for 2023, according to the latest report released by Transparency International. For India, its overall score remained largely “unchanged” on the corruption perceptions index.

On the travel risk, the number of terrorist attacks remain restricted to specific border regions such as Jammu and Kashmir. According to the Global Terrorism Index 2024 (GTI), the number of deaths from terrorism in India declined. The country reported a decrease of 18 deaths from terrorism in 2022-2023, following a decrease of 45 deaths in 2021-2022, and 49 in 2020-2021. 


Internet access and speed

The EAMI 2024 report ranks India second in terms of Internet freedom and sixth on internet speed.

One may note that industry analysts predict that by 2030, India’s internet economy would have grown to US$1 trillion, mostly because of e-commerce, which is projected to be valued at US$325 billion and ranking third worldwide.

With the roll-out of 5G networks, access to internet has spread across India rapidly in a short span of time. According to a report by the Internet and Mobile Association of India released in February 2024, over half of internet users live in India’s rural areas with 442 million active internet users recorded in 2023, surpassing urban India which had 378 million users.  

In 2023, it was reported that India offers some of the most affordable mobile data rates globally, with 1GB of data costing roughly INR 13 (US$0.16). The extensive use of mobile internet services in the nation has been facilitated by their affordability.

India’s communication sector is thriving in terms of technology development as well. The Indian National Space Promotion and Authorization Centre (IN-SPACe), the nation’s space regulator, gave its approval for a joint venture between Reliance Industries’ Jio Platforms and Luxembourg-based SES to operate satellites in the nation in June 2024.

The authorizations were given to Orbit Connect India, which will offer high-speed internet connectivity via satellite. This comes as Elon Musk’s Starlink and Amazon are attempting to get similar authorization for their satellite communication services in India.

Energy availability

India’s energy demand has surged for two primary reasons. Firstly, there is unprecedented power demand from both commercial sectors and residential segments. Secondly, there has been a significant increase in investment and activity in the generation of green energy.

The country’s economic growth necessitates more power to support manufacturing and related industrial activities. In its latest outlook, the International Monetary Fund (IMF) raised India’s growth estimates for 2024 from 6.5 percent to 6.8 percent, projecting it to maintain the position of the fastest-growing major economy. Additionally, the Reserve Bank of India (RBI) increased its GDP growth forecast for India for FY 2024-25 from 7 percent to 7.2 percent.

Experts predict that India’s energy needs will account for 25 percent of global demand within the next 20 years, with demand expected to increase by 25 percent to 35 percent by 2030.

The power sector is poised to face substantial demands in the upcoming years due to India’s manufacturing initiatives, which include domestic production of solar panels and promotion of electric vehicles. To stimulate the production and export of solar PV modules, India has launched a INR 240 billion (US$2.8 billion) production-linked incentive (PLI) program aimed at boosting solar power.

India’s efforts to attract foreign investors

According to the EAMI 2024 report, India has the highest corporate tax rate among all nations, coupled with relatively high import duties. The initiative and policies in the domestic market aim to support local manufacturing companies by imposing high tariffs on imported goods and entities.

However, India recognizes the need for higher foreign investment and is working towards reducing these tariff barriers. It provides several advantages for high-value investments, even though it has one of the highest corporate tax rates for foreign companies.

Incentives for eligible investors include tax-free exports, deferred taxes on imported capital goods for manufacturing, and deductions for R&D expenditure. Additionally, large-scale electronic manufacturers receive a special Production-Linked Incentive (PLI) ranging from 4-6 percent based on incremental sales for five years. Moreover, major Indian states offer a range of fiscal and non-fiscal incentives under their Industrial Policies.


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