How Sourcing From India Can Benefit Foreign Businesses
In the latest landscape of the global economy, Businesses are on the constant lookout for multiple ways to optimize their supply chain and minimize costs. So, when sourcing comes into play, India sourcing is a preferred choice for many on the hunt for competitive advantages.
Here, we will get into some of the major reasons why sourcing from India can be very beneficial for your businesses operating overseas. Keep reading to unveil something you can get advantage from!
What Are The Advantages of Sourcing From India For Foreign Countries?
Sourcing from India offers a plethora of benefits for foreign countries. Here are the major ones that can help you boost your business in any part of the world:
1. India’s Tech Savvy Youth
India can boast of its youth having remarkable technical expertise that can benefit foreign trade to a greater extent. The readily available skilled workforce provides a great opportunity for flexibility and cost efficiency. This benefit means harnessing India’s manufacturing and production expertise to its best in a wide range of products.
2. Government Policies Driving Growth and Innovation
The Indian Government is very active and thoughtful about the expansion of manufacturing businesses in India. That’s why the “Make in India” campaign fosters innovation and investment to establish cutting-edge infrastructure. It encourages local manufacturing.
Other than this, many other policies like “Ease of Doing Business,” “Industrial Corridor Development Program,” and “National Logistics Policy” have also been seen lately with the mission to make India a prominent global manufacturing hub. This all leads to foreign businesses getting the best advantages possible.
3. Strategic Location
Located right at the head of the Indian Ocean, the Indian subcontinent enjoys a very strategic location at the crossroads of trans-Indian Ocean routes. It makes an important link with East Asian and Western nations. This strategic geographical location allows foreign businesses to engage in product sourcing from India and effortlessly ship their goods to destinations worldwide. But to streamline this process, these businesses need to collaborate with reliable vendor development services providers.
Among these, Zoglix stands as a leading player in facilitating seamless product sourcing and supply chain solutions. With a proven track of reliability and efficiency, Zoglix is always ready to empower businesses in navigating the complexities of international trade and maximizing their global reach.
4. India’s Abundance of Natural Resources
It’s a known fact that India is rich in natural resources. Therefore, raw materials like metals, wood, silk, etc. are easily available and at a lower cost. It eventually results in lower costs, allowing you to offer competitive rates to your customers.
5. Low Labor Cost
When compared with other developed countries, India’s labor costs are extremely low thanks to its growing population. It’s a huge plus for suppliers, as they manufacture goods at a much lower cost. Therefore, foreign businesses can sell at lower prices, which is the backbone of attracting customers.
6. Trade Agreements With Multiple Nations
India has Free Trade Agreements (FTAs) with more than 13 nations in order to facilitate easy cross-border import and export by reducing or eliminating government tariffs, prohibitions, subsidies, and quotas. The list of countries and regions enjoying trade agreements with India includes:
- India-Sri Lanka Free Trade Agreement
- Agreement on the South Asian Free Trade Area (SAFTA)
- India-Nepal Treaty of Trade
- India-Bhutan Agreement on Trade, Commerce, and Transit
- India-South Korea Comprehensive Economic Partnership Agreement (CEPA)
- India-Japan CEPA
- India-Malaysia CECA
- India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA)
Other than FTAs, India has also entered into 6 limited coverage Preferential Trade Agreements (PTAs) with various regions:
- Asia Pacific Trade Agreement (APTA)
- Global System of Trade Preferences (GSTP)
- SAARC Preferential Trading Agreement (SAPTA)
- India-MERCOSUR PTA
- India-Chile PTA
These agreements strengthen India’s trade relations with other countries.
Key Considerations for Businesses Sourcing from India
Here are some important things that foreign businesses must keep in mind while sourcing from India:
1. Look For Both Online and Offline Sources
It’s vital that one explores both online and offline sources to close the best deal in the Indian market, from finding the right manufacturers to the right products. It will assist you in dealing with your customers in the proper manner by making available what they actually require. On top of that, it’s the ideal way to find a range of products to expand and add to your current product line.
2. Check For The Supplier’s Limit
Understanding the supplier’s limit is one of the most important factors to consider when planning to source from India. Why? If your business deals with seasonal products, your product needs will be huge at some point in the year, which one supplier may not be able to fulfill. In that case, you must collaborate with the right supplier to bridge the supply gap.
3. Ask For The Drop Shipping Service
Drop shipping is a service provided by manufacturers where they directly deliver the goods to the final customers, eliminating the hassle of the company dealing with all the handling and shipping. It’s the best way to make more profits.
4. Keep Your Backup Plan Ready
Many might take it lightly, but unfavorable situations are always uninvited. There could be incidents where the supplier fails to fulfill your orders due to factors like labor strikes, accidents, financial constraints, and other unforeseen circumstances. In such cases, you should be ready with plan B so your operations don’t get hampered.
Sourcing from India offers numerous benefits for foreign businesses like a skilled workforce, supportive government policies, strategic location, abundant resources, and favorable trade agreements. However, businesses should be mindful of key considerations to make sure of a successful sourcing experience from a favorable country like India. By leveraging India’s strengths and planning for risks, businesses can optimize their supply chains and flourish in the global market.