What are the pros and cons of India VS ASEAN for outsourced electronics manufacturing

Are you considering India as an outsourcing destination? What are the pros and cons of working with EMS providers in the subcontinent compared to ASEAN (the Association of Southeast Asian Nations)?

Where to outsource: India Vs ASEAN?

Why India?
With companies like Apple diversifying their supply chain away from China, India is being taken increasingly seriously as an attractive destination for electronics services design and manufacturing. But why?

An internal market is driving demand
According to Fortune magazine, India has emerged as the world's second-fastest-growing market for laptops, tablets, servers, and data centres, trailing closely behind China itself. There are compelling reasons, therefore, for India to develop its internal electronics manufacturing industry - and one off-shoot of this is predicted to be its contract manufacturing sector.

Growing pool of electronics talent
There are fast-growing electronics capabilities and facilities in the subcontinent, served by a reservoir of skilled labour. Don’t forget, over 99% of mobile phones sold and used in India are now built in India. Compare that to an almost complete reliance on foreign imports just nine years ago. Capabilities and skills are rising to meet demand.

Younger talent on the rise
Commentators also note the similarity between the position of China before it began its economic rise and the present-day situation in India. A young workforce, hungry for change is set to transform the nation with a new attitude to quality and efficiency:

“With a median age of 28, India shares a parallel with China's position in 2008 when it was on the cusp of rapid industrial and economic growth. This similarity accentuates India's potential to emulate China's trajectory and evolve into a powerhouse within the electronics manufacturing domain.”
Source: Fortune India

Government focus on electronics manufacturing
India's EMS industry is set for substantial expansion, driven by two pivotal elements: the benefit of low labour costs and robust government backing. The Indian government is vigorously fostering this sector (and its supply chain) with strategies like the Production Linked Incentive (PLI) scheme and the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS).
Why not India?

Quality consistency
While quality standards are improving, ensuring consistent quality across different suppliers can be challenging. As this Op-Ed in the Indian publication, Deccan Herald puts it, non-conformance has been endemic in the country’s manufacturing industry for years - as cost cutting often trumped ‘quality culture’.
Imposition of quality standards raises manufacturing costs. Rigorous quality control requires frequent checking of ‘in-process quality’ and timely rejection of deficient items, increasing both personnel and material costs. So, firms take shortcuts to save costs. They are not fastidious about quality control as our regulatory approach is different.”
To compete internationally, many in the subcontinent agree that a culture of quality needs to be created that permeates every part of the supply chain.

Infrastructure variability
Despite improvements, some regions still lag in terms of infrastructure, which can affect logistics and supply chain efficiency.
There are challenges with building new infrastructure needed to support manufacturing investments, including expansions of ports and ensuring that pick-up points line up with existing trade routes”
Source: Manufacturing Dive

Semiconductor supply
Despite the best efforts of the Indian government, semiconductor supply is still a serious impediment to those seeking turnkey design and manufacturing solutions to be delivered at the right cost in the Indian subcontinent.