5 Strategies for Success in India

5 Strategies for Success in India

India's economic growth, government support and infrastructure improvements make it an ideal time to invest in manufacturing and distribution. Success depends on making informed decisions about where to operate, how to build a distribution network and which regions to target. By considering both established and emerging markets within India, businesses can balance cost efficiency, scalability and long-term growth potential.

Why India is an Attractive Market for Manufacturing & Distribution – Why and Why now?

• Large and Growing Consumer Market: India, with 1.4 billion people, is set to become the 3rd largest consumer market by 2030. The expanding middle class and rising disposable incomes are driving strong demand.
• Competitive Manufacturing Costs: Low labor and land costs boost India’s cost competitiveness. Government incentives like the Production Linked Incentive offer direct financial incentives to companies and reduce operating expenses.
• Government Support: Initiatives like "Make in India" and GST 2.0 make doing business easier, streamline taxation, improve supply chain efficiency and catalyze growth for companies.
• Infrastructure Upgrades: The Sagarmala and Bharatmala initiatives by the government (focused on modernising ports and building a high-speed highway network respectively), alongside private investments in real estate and transportation are improving logistics efficiency and reducing costs.

Top 5 Strategies to Consider for Success in India

1.      Select the Right Locations for Your Manufacturing and Sourcing Strategy

• For domestic sourcing and manufacturing, established hubs like Chennai, Mumbai and Bengaluru offer stability and developed ecosystems, but emerging locations such as Hyderabad, Visakhapatnam and Noida offer significant cost advantages, lower attrition rates, more greenfield options and greater possibility for scalability.
• Tier 2 and Tier 3 cities can provide up to 30% savings due to lower labor rates and improving infrastructure.

2.      Leverage Government Support and Incentives

• The Indian government offers various schemes to boost manufacturing, including the PLI scheme (Production Linked Incentive) and special incentives. Under the PLI scheme, companies can receive cashbacks of 4% to 6% on annual incremental sales, with high-priority sectors such as EVs and drones eligible for cashbacks as high as 18%. As of 2026, new reforms have eliminated import duties on essential high-tech machinery required for modern factory setups.
• By strategically leveraging these schemes, you can significantly reduce your initial Capital Expenditure and improve your profit margins over multiple years.

3.      Optimize Your Distribution Network

• Moving your goods from Chennai in Southern India to a city in Northern India is like using a London warehouse to fulfil an order in Athens. The large distances and historically inefficient domestic supply chains make it necessary to optimize your domestic distribution network in India.
• Depending on the type of product, centralized distribution centers in cities like Delhi, Mumbai or Bengaluru may be best for high-value goods, while lower-value consumer goods may benefit from decentralized networks spread across the country.
• Evaluate when to take over the local market from a distributor. To keep your risks low, begin with an online-first strategy and expand into omnichannel distribution as you gain a deeper understanding of the market

4.      Adapt to Regional Differences

• Avoid viewing India as a uniform market. Different regions have unique cultures, demand patterns and industrial strengths. Chennai is known for automotive manufacturing, while Delhi-NCR is a hub for electronics and Hyderabad specializes in life sciences. Similarly, customers in one region can be high-spending & trend driven while in another region can be value-conscious and quality-driven.
• Tailoring your approach to regional nuances is essential for success.

5.      Prepare for the Long-Term

• India’s market is evolving rapidly. Stay informed about infrastructure improvements, such as port expansions under the Sagarmala initiative and road upgrades through the Bharatmala initiative. Such initiatives have successfully pushed India’s logistics costs down to 8% of GDP, placing the country squarely on par with advanced global benchmarks.
• As logistics costs decrease, be ready to scale your operations while maintaining flexibility.

Proven Case Studies

1.      Distribution

• A consumer goods company removed its distributor in India and took the market direct. Although fulfillment costs increased, eliminating distributor margins led to lower overall costs and improved customer experience.
• A medical devices company expanded its distribution footprint to improve service levels and drive growth. By moving from one national DC and one satellite DC to four DCs and nine satellite DCs, the share of volume delivered within two days increased from 37% to 90%, enabling double-digit growth.

2.      Manufacturing

• A chemical manufacturer established a new plant in India to overcome capacity constraints, reducing inventory and transportation costs by locating close to suppliers and customers.
• An aerospace manufacturer selected India for its next manufacturing location to reduce risk and improve supply chain resilience. An Asia-wide location study concluded with the selection of an Indian city for the company’s second manufacturing plant in the region.

To get more information and request a copy of the full webinar presentation on Growing in India, contact Mayank @ Mayank.Srivastava@bciglobal.com or click here.