Article

Manufacturing destinations for investments in India

Integrated solutions to guide your manufacturing strategy from concept to operation

September 29, 2021
Contributors:
  • Aritra Das
  • Joshi Sheelam

The COVID-19 has exacerbated the uncertainty in the supply chain, prompting manufacturers to reconsider their sourcing strategies. As a result, many companies are expected to eliminate dependence on a single source and establish a flexible and adaptable supply chain. South Asian countries are likely to benefit from this diversification.

Advantage India

India provides an excellent opportunity for manufacturing units because of its geographic location and domestic market with a large consumption base (18% of global consumers reside in India). The country’s government has taken several measures in the past two years to make India an attractive investment option – improvement in ease of doing business, tax advantage to new manufacturing units, the introduction of production linked incentives, to name a few.

Investments in the past 18 months

The government initiatives and reforms have become fundamental steppingstones to shape India as an efficient, equitable and resilient manufacturing hub. They have resulted in the country witnessing the highest greenfield manufacturing investment intentions among MITI-V countries (Malaysia, Indonesia, Thailand, India & Vietnam), with 64 projects and investments totalling USD 16.63 billion during Jan 2020 – July 2021. 

Fig: Greenfield Manufacturing FDI Investment Intentions / MoU (Jan 2020 – Jul 2021)

Source: Moody's Orbis Database

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Integrated solutions from concept to operation

Setting up a new manufacturing plant can be a complex and challenging process. We offer a unified solution supporting manufacturers from 'Concept' or location evaluation to the commercial 'Operation' for manufacturing plants in India. It is built and delivered in 6 key stages:


  • Target: Identification of the right location in the country

  • Analyse: Understanding taxes and incentives applicable

  • Transact: Investing in the right site or a suitable building

  • Ascertain: Detailed due diligence (legal, technical, environment, health and safety, etc.) of the property

  • Develop: Construction of the manufacturing plant

  • Manage: Maintenance and operations of the facility

Our solution accommodates the entire range of services an occupier/manufacturer seeks to ground its manufacturing investments in the country and provides a one-stop service that integrates all stakeholders and offers complete visibility of the entire process to the manufacturer.

In the six-part knowledge series, we take you through each milestone of these six stages and the key parameters that can impact the entire process from concept to operation. This is the first blog of the series focusing on the initial stage of the process.

Target

Location Selection: Destinations for investments

Destination selection is the first decision-making step that kick-starts the six-stage process of business entry. India has successfully attracted international and domestic investments across its geography and a vast spectrum of industrial sectors. Here is a snapshot of investment interests in the past 18 months. Investments in India have poured in from around the world with significant interest from China, France, Germany, Japan, Netherlands, South Korea, Taiwan (Chinese Taipei), UK and the US. Most of the manufacturers have plans to Make in India and Go Global from here.

Make in India: International Investment Intentions between Jan 2020 and July 2021

Company Name Sector Country of origin Million USD at 1USD=INR 74 State
Eickhoff Wind Other Renewables Germany 55 Tamil Nadu
Kia Motors Auto+EV South Korea 54 Andhra Pradesh
Sami-Sabinsa Group Pharma USA 81 Karnataka
Major Oil Co. Petroleum USA 103 Maharashtra
Pegatron Electronics Taiwan 149 Tamil Nadu
Alliance Tire Gr. (ATG) - Yokohama Auto+EV Japan 168 Andhra Pradesh
Defence Manu. Co. Defence Russia 338 Tamil Nadu
Foxconn Electronics Taiwan 541 Tamil Nadu
First Solar Solar USA 566 Tamil Nadu
Samsung Electronics South Korea 652 Noida, UP
IMR Metallurgical Resources-AG Metal Switzerland 1,622 Andhra Pradesh
Wistron Electronics Taiwan 171 Uttar Pradesh
Arcelor Mittal Nippon Steel Metal Luxembourg 6,757 Gujarat
Arcelor Mittal Solar Luxembourg 257 Rajasthan
MG Motor Auto+EV China 203 Gujarat
Wistron Electronics Taiwan 182 Uttar Pradesh
Daicel Auto+EV Japan 31 Tamil Nadu
Transworld Group Container manufacturing UAE 27 Gujarat
Safran SA Engineering France 1,172 Uttar Pradesh
Jabil Electronics USA 405 Maharashtra
TCL Group Electronics China 2,566 Andhra Pradesh

Disclaimer: The data is compiled from various media/news releases, market information/market intelligence. While every care is taken to validate the announcements, JLL or any of its employees does not accept any liability for negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this data. This is NOT an exhaustive list and indicative with key details.

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Atmanirbhar Bharat: Domestic manufacturing intentions (Jan 2020 – July 2021)

Domestic or Indian companies have also displayed confidence in the evolving manufacturing sectors. After extensive research of domestic investment intentions by domestic/Indian companies, JLL estimates the investment figures to be more than USD ~60 billion in the past 18 months (Jan 2020 to July 2021). While core sectors such as steel and other metals have been the majority contributors, emerging sectors such as electric vehicles, solar and other renewables, defence, etc., have witnessed a sizeable investment – to the tune of 40% of the total.

Note: Investment intention includes Greenfield as well as Brownfield developments of these firms.

Atmanirbhar Investment Intentions by Indian Companies (Jan 2020 – July 2021)

Company Name Sector Million USD at 1USD=INR 74 State
Granules India Pharma 54 Telangana
Epsilon Carbon Chemical 122 Karnataka
Voltas Electronics 135 Tamil Nadu
ReNew Power Solar 216 Rajasthan
Ola Electric Mobility Auto+EV 324 Tamil Nadu
Tata Chemical Auto+EV 541 Gujarat
Tata Electronics Electronics 676 Tamil Nadu
Bharat Dynamics Limited Defence 54 Uttar Pradesh
Mankind Pharma 149 Gujarat
Indian Oil Corporation Limited Other Renewables 118 Odisha
Vedanta Limited Metal 893 Chhattisgarh
Anchor Research Lab LLP Defence 74 Uttar Pradesh
Reliance Industries Auto+EV 8,108 Maharashtra
Jindal Steel & Power Limited Metal 1,014 Andhra Pradesh
Maruti Suzuki Auto+EV 2,432 Haryana
Reliance Industries Other Renewables 8,108 Gujarat
Bhushan Power and steel limited Metal 7,432 Odisha
Tata Steel Limited Metal 6,432 Odisha
Cool Growth Works factory Metal 676 West Bengal
TVS Auto+EV 135 Tamil Nadu

Disclaimer: The data is compiled from various media/news releases, market information/market intelligence. While every care is taken to validate the announcements, Jones Lang LaSalle or any of its employees does not accept any liability for negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this data. This is NOT an exhaustive list and indicative with key details.

India is on the cusp of a transformational change in the manufacturing sector as the country has taken several measures to competitively position itself in the international market as well as policy initiatives to promote domestic manufacturing. Stay with us as we take you through a manufacturer’s journey and key learnings of setting up a plant in India.

Acknowledgement:

JLL India would like to take this opportunity to thank Invest India, the National Investment Promotion and Facilitation Agency of the Government of India, for their sincere efforts to facilitate investments in India. This report would not have been possible without credible inputs and suggestions from many people in Invest India.

We would also like to acknowledge the strategic and critical data inputs from Chandranath Dey, Sujash Bera, Charmy Shah & Haavani Kapadia.

For business enquiries, reach out to Yogesh Shevde.

Contact Yogesh Shevde

Head, Logistics & Industrial, India, JLL

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