India ahead of China, Vietnam in cheap manufacturing; ranks no. 1

In a boost to India's push for ease of doing business, the country has been ranked first out of a total of 85 nations in cheap manufacturing costs, even ahead of neighbouring China and Vietnam.

The country has been ranked 31st in the overall best countries ranking, while 37 in the 'open for business’ category, a US News and World Report shows. Switzerland has topped the chart in the ranking of overall best countries, followed by Germany, Canada, US and Sweden.

The report ranks 85 nations across 73 attributes clubbed in 10 sub-categories, which include open for business, quality of life, agility, entrepreneurship, and adventure.

India, with an overall score of 40.8, ranks 5 in movers and 13 in the ‘power’ category. Its ranking in categories such as entrepreneurship, cultural influence, and quality of life is 31, 34, and 38, respectively. In heritage, its ranking stands at 8 and 40 in agility.

In open for the business category, India's score in 'not corrupt' subcategory stands at 18.1, which is quite low. In the 'not bureaucratic' subcategory, its rank is 81.9; 16 in 'favourable tax environment'; and just 3.5 in 'transparent government policies'.

In entrepreneurship, India's rank in the 'innovative' subcategory stands at 21.1; 44.5 in the skilled labour force; and 62.5 in connectivity. However, in terms of well-developed infrastructure, legal framework and educated population, India ranks low at 3.7, 4.4 and 7.8, respectively.

China, on the other hand, ranks second in cheap manufacturing costs and 17 in the category of best countries overall. It ranks 2nd in power, 5 in entrepreneurship and 51 in the 'open for business' category. China, with a GDP of $17.7 trillion, ranks 17 among the overall best countries.

With a GDP of $363 billion, Vietnam, another major global industrial hub, ranked 47 in the overall business category. In cheap manufacturing costs, its ranking is 3rd; 40th in entrepreneurship; 30 in power and 40 in quality of life.

Initiatives such as production-linked incentive (PLI) schemes in several sectors and the reduction of compliance burdens have helped build India as a major ‘manufacturing hub’ and a big alternative to China.

Prime Minister Narendra Modi, addressing the opening event of global investors' meet 'Invest Karnataka 2022' on November 2, said even during the current uncertain times, most nations are convinced about the fundamentals of the Indian economy. “India received a record foreign investment of $84 billion last year,” he said.

The PM said India has set a target of becoming a developed nation by 2047. A decade ago, the country was grappling with policy and implementation-related issues, he said, adding that “instead of trapping the investors in the red tape", the Centre has created an environment of the red carpet for investment. Mentioning GST, IBC, banking reforms, UPI, abolition of 1,500 outdated laws and 40,000 unnecessary compliances, the PM said: "Today bold reforms are carried out in every sphere of the government.”