India vs. China for Product Sourcing: What US Businesses Should Know
For decades, China has been the default sourcing destination for US businesses. But shifting trade policies, rising costs, and supply chain disruptions have made India an increasingly attractive alternative. Here's a practical comparison.
Cost Considerations
India's labor costs are competitive with China's, and in many product categories, total landed costs are comparable or lower. However, India's logistics infrastructure, while improving rapidly, can add complexity that needs to be factored into cost calculations.
Manufacturing Capabilities
China still leads in electronics, high-precision components, and highly automated mass production. India excels in textiles, pharmaceuticals, chemicals, hand-crafted goods, and an expanding range of industrial products. India's disposable products sector, in particular, has grown significantly.
Trade Policy and Tariffs
Tariff situations between the US and its trading partners change frequently. While India has generally maintained a favorable trade position relative to China for many product categories, specific tariff rates can shift based on policy decisions, trade agreements, and product classifications. We recommend consulting current tariff schedules or working with a sourcing partner who stays on top of these changes to ensure you're making decisions based on the latest information.
Supply Chain Diversification
Many US businesses are pursuing a "China Plus One" strategy — maintaining some Chinese sourcing while developing alternative suppliers in India and other countries. This approach reduces dependence on any single country and builds supply chain resilience.
The Bottom Line
India isn't a wholesale replacement for China — it's a strategic complement. The key is understanding which products and categories are best suited to India's manufacturing strengths, and working with a sourcing partner who has deep, on-the-ground expertise.
Unique Sourcing specializes in helping US businesses navigate India's manufacturing landscape — reach out to discuss whether India is the right fit for your product.