India has been ranked second, head of the US and South Korea, in terms of manufacturing competence globally, a report by Deloitte has said.
China, followed by India and South Korea has been ranked first, second and third respectively in the 2010 Global Manufacturing Competitiveness Index; a result of the collaboration between Deloitte Touche Tohmatsu and the US Council on Competitiveness.
"In less than a decade, a new world order for manufacturing competitiveness has emerged along with a tectonic shift in regional manufacturing competence," the report said.
The rise in the manufacturing competitiveness of three countries in particular -- China, India, and the Republic of Korea (Korea) -- appears to parallel the rapidly growing and important Asian market," said the 56-page report.
The report notes that China's ascent to the top of the list is not surprising, given its rising eminence in the manufacturing sector over the past ten years, particularly as a regional hub for foreign outsourced production, foreign
direct investments, and joint ventures.
"Perhaps more surprising is that India is now positioned at number two and gaining an even stronger foothold on that position over the next five years," the report said, adding India's rich talent pool of scientists, researchers, and
engineers as well as its large, well-educated English-speaking workforce and democratic regime make it an attractive destination for manufacturers.
Noting that since the mid-1990s, India's software industry has escalated to new heights and post-economic liberation has also opened a pathway to unprecedented market opportunities for Indian manufacturing, it said moreover,
beyond low-cost, Indian manufacturers gained experience in quality improvement and Japanese principles of quality management, with the largest number of Deming Award winners outside of Japan.
"The country is also rapidly expanding its capabilities in engineering design and development and embedded software development, which form an integral part of many modern-day
manufactured products," it said.
The importance of India to manufacturing executives around the world underscores two important points, it said.
Under the current competitive index China tops the ranking with the maximum 10 points, followed by India (8.15),South Korea (6.79), the US (5.84), Brazil (5.41) and Japan (5.11).
First, strength in research and development, paired with engineering, software, and technology integration abilities, are viewed by global executives as a vital element of the talent-driven and innovative manufacturing enterprise of the 21st century.
"Second, manufacturing executives increasingly view India as a place where they can design, develop and manufacture innovative products for sale in local as well as in global
markets," the report said.
"These factors explain, in part, India's rise from a low-cost, 'back office' location to a country that is well-positioned to be an active participant in the entire value chain-as well as it now being viewed by many executives as an integral part of their global manufacturing enterprise and location strategy," the report said.
Projecting the competitiveness ranking after five years, the report says while China with 10 points would still remain on the top, India would inch closer to China with 9.01 points.
South Korea would remain at the third slot with 6.53 points, while Brazil (6.32) would replace US (5.38) to the fourth slot.
The United States would drop down to the fifth place, followed by Mexico (4.84), Japan (4.74) and Germany (4.53).