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- Asia Manufacturing Index: China Leads, India Ranks 6th; Needs Infra & Tax Reform
New Delhi4 minutes ago
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India’s efforts to emerge as Asia’s manufacturing hub have received a slow response. In the Asia Manufacturing Index (AMI) 2026 report, India is at number 6 in the list of 11 major Asian countries.
India was ranked fourth among 8 countries in the 2024 report, but since last year it has remained stable at sixth position. According to the report, India needs to further improve its infrastructure and tax rules to become a global manufacturing hub.
China remains at number 1, Malaysia’s big leap
According to the index, China still remains the world’s first choice in terms of manufacturing in Asia. Malaysia has achieved great success this time. Malaysia has overtaken Vietnam and secured the second position.
Vietnam is at third, Singapore at fourth and South Korea at 5th. India is behind these countries at sixth place, while Indonesia is at 7th and Thailand at 8th.
Manufacturing capacity of countries measured on 8 scales
This report has been released by Dijon Shira and Associates. In this, the manufacturing capacity of any country has been assessed on 8 main grounds. These include economy, political risk, business environment, international trade, tax policy, infrastructure, labor force and environment-social-governance (ESG).
Where is India strong and where does it need improvement?
- Strength: India’s biggest strength is its large workforce (availability of workers) and growing domestic market. Due to government policies like PLI scheme, a lot of investment is coming in the electronics and pharma sector.
- Weaknesses: In terms of infrastructure, India is still far behind countries like Singapore and China. Apart from this, India has also got low marks in terms of perception regarding corruption and institutional stability. Tax policy and reducing logistics cost is a big challenge for India.
Corruption and political risk are also big concerns
It has been said in the report that in terms of corruption, India is behind its competing 6 countries. Singapore is considered the most transparent and safe in this matter. Experts say that if India wants to make ‘Make in India’ completely successful, then it will have to simplify its regulatory process.
What is the path of the future?
India aims to become a $1 trillion manufacturing economy by fiscal year 2026. The report suggests that India needs to focus on skill development and digital infrastructure rather than relying solely on labor availability. If India reduces its logistics costs, it can give tough competition to Vietnam and Malaysia in the next few years.
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