Sourcing Opportunities for Foreign Companies from India

Unlocking Sourcing Opportunities for Foreign Companies from India

The global supply chain landscape has undergone a seismic shift in the wake of the Covid-19 pandemic, compelling companies that traditionally relied on overseas markets for product sourcing to seek alternative options. In this context, India has emerged as a compelling and viable choice. With its vast consumer market, developing infrastructure, and a rapidly expanding logistics sector, sourcing from India has become the preferred option for foreign firms.

Advantages of Sourcing from India for Foreign Companies

Sourcing from the Indian market offers numerous benefits for foreign organizations. Here are some key advantages:

Availability of Skilled Workforce:

India boasts a large population of young individuals with high technical expertise. This translates into a readily available pool of skilled workers, providing foreign manufacturers with flexibility and cost efficiency. Leveraging the technical know-how of the Indian workforce enables companies to enhance and scale their production processes by adopting different technologies.

Favorable Government Policies:

The Indian government has implemented several policies aimed at facilitating business growth and manufacturing in the country. The “Make in India” initiative, for instance, encourages innovation and investment to create state-of-the-art infrastructure. Other policies such as “Ease of Doing Business,” “Industrial Corridor Development Program,” and the “National Logistics Policy” further accelerate India’s journey toward becoming a global manufacturing hub.

Trade Agreements with Several Nations:

India has established Free Trade Agreements (FTAs) with more than 13 nations, enabling cross-border import and export with reduced or eliminated government tariffs, quotas, subsidies, and prohibitions. This facilitates cross-border import and export with reduced or no government tariffs, prohibitions, subsidies, or quotas. The following countries /regions enjoy trade agreements with India:

India-Sri-Lanka free trade agreement

the 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)

Apart from the free trade agreements, India has also signed 6 limited coverage preferential trade agreements (PTAs)-

Asia Pacific Trade Agreement (APTA)

Global System of Trade Preferences (GSTP)

SAARC Preferential Trading Agreement (SAPTA)


India-Chile PTA

Strategic Location:

Situated at the head of the Indian Ocean, the Indian subcontinent occupies a strategic position connecting East Asian and Western nations via trans-Indian Ocean routes. This advantageous location facilitates seamless global shipping of goods for foreign businesses sourcing products from India. Partnering with reliable vendor development services providers helps streamline logistics operations and ensures efficient worldwide distribution.

Vast Availability of Raw Materials:

India is abundant in natural resources, making essential raw materials readily accessible. From metals and wood to cotton, jute, and silk, India offers a diverse range of raw materials necessary for manufacturing. This availability allows manufacturers to reduce production costs and offer their end products at competitive rates.

Low Labor Costs:

With its growing population, India benefits from an ample labor force, leading to lower labor costs compared to developed nations. This cost advantage is significant for suppliers, enabling them to manufacture products at competitive prices. Consequently, foreign companies can sustainably source products from India and offer them in their target markets, maintaining a competitive edge.

Key Considerations for Sourcing from India

While sourcing from the Indian market, there are several aspects that businesses should bear in mind:

Explore Both Online and Offline Sources:

To find the best products from the Indian market, it is essential to explore both online and offline sourcing options. This approach allows businesses to discover suitable manufacturers capable of delivering goods aligned with consumer preferences. Moreover, it facilitates access to a wide variety of products, enabling the expansion of their product line-up.

Evaluate Supplier’s Capacity:

Determining the capacity of suppliers is crucial before initiating product sourcing from India. For businesses dealing with seasonal products or facing fluctuating demand, it is essential to assess whether the current supplier can meet increased demand during peak periods. If the supplier is unable to cope, partnering with additional manufacturers becomes necessary to bridge the supply gap.

Consider Drop Shipping Options:

Most Indian manufacturers offer the convenience of drop shipping, which involves delivering products directly to customers without the company having to handle warehousing and shipping logistics. Leveraging drop shipping services not only streamlines operations but also enhances profit margins for businesses.

Establish Backup Plans:

Unforeseen circumstances, such as labor strikes, accidents, or financial constraints, can disrupt the supply chain and impact product delivery. It is advisable to maintain contacts with alternative manufacturers to mitigate risks and ensure a stable supply chain in case the primary supplier encounters challenges.

Foster Partnerships in India:

Building partnerships in India is an effective way to sustainably source products. Such collaborations ensure adherence to strict quality control standards while enabling the establishment of long-term trade relationships, fostering mutual growth and success.

Seek Assistance from Management Consulting Firms:

Managing the complexities of sourcing from India can be challenging for foreign organizations. Engaging with management consulting firms that specialize in this domain can offer cost-effective solutions. These firms possess industry expertise, in-depth knowledge of top manufacturers, and familiarity with regulations, easing the process of building partnerships and managing sourcing operations.

How ANS Assist Foreign Companies

ANS, a prominent product-sourcing company in India, stands ready to support foreign entities in their sourcing endeavors. With a rigorous supplier selection process focused on product quality and production standards, ANS brings over three decades of experience in successfully establishing sourcing operations for international clients.

By partnering with ANS, foreign companies can tap into a vast network of reliable manufacturers, ensuring seamless sourcing and supply chain management while maintaining product quality and cost efficiency.

Sourcing from India presents a compelling opportunity for foreign businesses seeking to diversify their supply chains and leverage the advantages offered by India’s skilled workforce, favorable government policies, trade agreements, strategic location, abundant raw materials, and competitive labor costs. By embracing these opportunities and adopting the right strategies, companies can unlock the potential of the Indian market and drive their growth and success.

Management Consulting firms like ANS Legal and Business Services LLP (#ANS #ANSSERV #ANSLABS) help foreign businesses devise a successful entry and expansion plan for their market presence in India. ANS provides services of company establishment, partner & distributor search, site selection, mergers, and acquisitions, partner search, retail rollout, executive search, accounting & statutory compliance etc., which help companies start their business operations in India without much hassle.

Contact Now ANS Legal and Business Services LLP

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