News release

India and SE Asia emerge as manufacturing hubs - JLL

This is fueled by remarkable 55% increase in FDI equity inflow in the manufacturing sector from 2014-2023

May 30, 2024

Arundhati Bakshi Dighe

91 98193 90900

MUMBAI, May 30, 2024 – De-risking supply chains will push diversification of manufacturing hubs beyond China. According to JLL, Southeast Asia and India stand out to be net beneficiaries for companies keen to complement or diversify from their existing manufacturing bases in China.

“The Make in India initiative, Industrial Corridor Development Program, Production Linked Incentives (PLI), India Semiconductor Mission & National Logistics Policy are a few policies and initiatives that has helped propel the India story globally today. Not just that, the country’s demographic dividend and therefore being one of the largest consumer markets in World makes India an attractive proposition over other SEA countries. Manufacturing companies are exploring innovative transaction structures to complement their timeline targets and funding strategies in India,” said Chandranath Dey, Head (Operations & Business Development), Logistics & Industrial, India, JLL.

Make in India 2.0 continues its impressive trajectory, fuelled by remarkable 55% increase in Foreign Direct Investment (FDI) equity inflow in the manufacturing sector from 2014-2023, reaching a substantial USD 148.9 billion, compared to USD 96 billion between 2005-2014. This robust growth is further evidenced by notable 4.5 times increase in leasing activity for light manufacturing spaces in 2023, as compared to 2020, with projected Year -on -Year growth of ~25% in 2024.

India's growth story unfolds with remarkable contributions from the Engineering, Auto & Ancillary, and Electronics & White Goods sectors, driving the leasing demand for light manufacturing. “These thriving industries require spaces with advanced specifications, leading to a substantial 35% of manufacturing leasing being garnered through Built-to-Suit transactions. The remaining 65% is dominated by Ready-Built transactions, underscoring the eagerness of manufacturing companies to swiftly occupy readily available stock. Pune, Chennai, and NCR Delhi have emerged as prime destinations, luring manufacturing companies with their robust manufacturing ecosystems and well-developed infrastructure,” he added.

Over the past few years, companies have begun exploring the relocation of manufacturing outside of China. In Asia Pacific, this near/re/friend shoring trend has resulted in the China+1 strategy where companies add additional manufacturing bases outside of China to hedge against supply chain disruptions by reducing reliance on a single country.

According to JLL analysis, the impact has been mostly felt at the destination country, especially in Southeast Asia and India. As a result, governments are supporting these opportunities and implementing more policies that aim to boost their local manufacturing industries, placing a premium on land availability and access to capital sources.

The driving force behind this trend is not only the need for supply chain diversification, but also to capitalise on the strong economic fundamentals of this region, including a large population and labour pool, favourable costs, and various incentives. From a manufacturing investment perspective, these factors position SEA and India as major manufacturing hubs for global markets.

According to multiple sources, rising costs in China over the past decade have served as the primary accelerator of this shift towards diversification. Higher demand for industrial land, coupled with rising wages and material costs, has also pushed up land prices in China, which can be up to two times higher compared to some SEA countries and India.

JLL estimates China holds the lion’s share of manufacturing FDI in the region, but the gap is narrowing. Indonesia raked in USD 28.7 billion in investment last year, up USD 4 billion from the year earlier. Vietnam’s FDI in manufacturing climbed over 30% to hit USD 23.5 billion.

Furthermore, factors such as skilled labour, infrastructure, environmental regulations, proximity to suppliers and customers, and political stability contribute significantly to a factory’s long-term success and sustainability. JLL recommends careful evaluation of these non-cost or qualitative factors are crucial to make an informed decision and lay a strong foundation for future growth.

About JLL

For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 108,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit

About JLL India

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 14,000 professionals. The Firm provides investors, developers, local corporates and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit