In a rapidly changing global environment, multinational corporations are rethinking how and where they source, manufacture and distribute. Geopolitical fragmentation, tariff shifts, regulatory scrutiny, cyber risk and the need for greater supply chain visibility are reshaping network design and investment decisions. As a result, businesses are diversifying supply bases, regionalising operations and strengthening resilience across their value chains.
Limit and manage disruption, mitigate risk, and build resilience and agility
Against this backdrop, CXOs are reassessing operating models to respond faster to disruption, reduce concentration risk and align supply chains with evolving business priorities. In doing so, they are seeking expert support to manage transition, mitigate risk and build more resilient, agile and future-ready supply chains.
KPMG in India has been closely monitoring the shifting investment trends and supporting clients in their supply chain diversification strategies. Through focused efforts, we are helping clients identify key risk areas that complicate strategic transformation, aiming for business continuity and resilience. Our efforts are channelised to help clients get forward-looking perspectives on areas related to:
India advantage
India, like other emerging economies, is strengthening its investment attractiveness and positioning itself as a credible alternative for global manufacturing and sourcing. Government-led reforms - including production-linked incentives (PLI), infrastructure investment under the National Infrastructure Pipeline (NIP), multimodal connectivity through PM Gati Shakti, the National Logistics Policy (NLP), competitive corporate tax frameworks for manufacturing and labour reforms - are reinforcing India’s appeal as a global manufacturing hub.
Notable government reforms*
What makes India a favourable manufacturing destination?
Government of India’s strategic priorities
Sectors of strategic importance in India
Priority growth sectors in India
KPMG In India’s Supply Chain offerings
We understand the complexities of today’s volatile and high-risk business environment. Our team of experienced professionals work across geographies and sectors to support organisations with comprehensive offerings and a value-driven approach specifically revolving around the following areas:
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Success stories and experiences of our valued clients
Discover narratives that highlight the challenges our clients faced, the services we provided, and the results they achieved. These case studies offer a detailed look into our collaborative process, demonstrating our commitment to understanding each client's unique needs and delivering customised services that drive success.
Driving growth with Supply Chain trends
- Powering India's rise in advanced semiconductor innovation
- India's Electronic Manufacturing Services (EMS)
- Deepening U.S.-India trade ties
- Cost discipline for global electronics hub
- Celonis Process Intelligence Day
- AIMA National Leadership Conclave
- Asian Business Leaders Conclave 2026
- Strategic integration for Global growth
- ET Electronics and Semiconductor Manufacturing Summit
- ET Now Global Business Summit
- Building Domestic Value Chains in Andra Pradesh
- India Inc on the move - Smart and sustainable manufacturing
- Union Budget 2026-27
- India’s Manufacturing Transformation
- India’s Strategic Edge
- The Economic Times Global Manufacturing Conclave
- CII CFO Roundtable
- India's semiconductor ambitions are gathering pace
- Decoding taxation and ESG
- The CFO Board’s Risk Roundtable
India's strongest opportunity lies in semiconductor design advanced packaging and system-level integration. India can build a differentiated position by integrating design, packaging and domain-specific applications such as EVs, industrial electronics, and other emerging sectors.
Additional indicators suggest the sector may be entering a new phase. Indian startups are now taping out chips at global foundries, while partnerships involving manufacturing, workforce training, and technology transfer are beginning to create deeper ecosystem capabilities.
- Rohan Rao
- Raghavan Viswanathan
India’s EMS sector has reached a pivotal moment where the foundations of scale are firmly in place, but the next phase of growth will be defined by depth. As global supply chains reconfigure towards resilience and multi node manufacturing, India has a time bound opportunity to move beyond assembly led growth and build integrated, design driven capabilities. Realising this potential will require sustained investment in component ecosystems, engineering depth, and supply chain sophistication to unlock higher value participation in global electronics manufacturing.
The trajectory of India’s EMS industry will be determined not just by how much capacity it builds, but by where it chooses to compete. While consumer electronics will continue to anchor scale, long term value lies in higher complexity segments such as automotive, industrial, and aerospace, where certification depth, precision, and engineering capabilities create durable advantage.
The transition from capacity led to capability led growth will be critical for India to emerge as a globally competitive electronics manufacturing hub.
- Neeraj Bansal
- Manoj Kumar Vijai
- Naveen Aggarwal
U.S.-India trade is entering a high growth phase, with exports already at USD87 billion and nearly a fifth of India’s merchandise trade. The USD500 billion ambition by 2030 is within reach, driven by stronger supply chains, technology collaboration and deeper integration across manufacturing and services.
As global value chains realign, India’s scale, cost advantage and talent base position it as a trusted partner for U.S. businesses. The next phase will be defined by execution, translating policy momentum into resilient, long term economic outcomes.
The U.S.-India economic relationship is increasingly defined by deeper commercial linkages, institutional trust and a shared commitment to long-term growth.
As trade expands across key sectors and new opportunities emerge in manufacturing, energy and technology, the focus must shift towards execution, strengthening supply chains, improving market access and ensuring regulatory predictability. Sustained collaboration across businesses and policymakers will be critical to translating this momentum into durable economic outcomes.
The U.S.-India corridor is emerging as a pillar of resilience in an increasingly fragmented and competitive global environment.
With strong momentum across key sectors such as electronics, pharmaceuticals and high-value services, the focus is now on translating opportunity into execution through tighter supply linkages, regulatory coherence and predictable market access.
Advancing these priorities can accelerate deeper economic integration and support the shared ambition of achieving USD 500 billion in bilateral trade by 2030.
Scale alone will not make India a global electronics hub. Cost discipline will.
India’s electronics manufacturing story is accelerating, but structural cost inefficiencies still hold the sector back. Addressing these challenges across the value chain is critical for India to compete with established global manufacturing centers.
The next phase of growth will be defined by execution, not ambition
- Anuj Kumar
- Yugesh Algawe
Four things are critical for supply chain leaders and teams to bridge the planning and execution gap; first, creating a common data fabric and business context from fragmented systems, second, providing a control tower view to continuously monitor the health of key KPIs and process performance indicators, third, ability to detect process deviations as they occur in real-time and fourth, to drive proactive actions trough agents or with human in the loop.
Supply chain transformation is not just about improving planning in isolation. The real breakthrough lies in seamlessly bridging the gap between planning and execution through real time, data driven orchestration. By leveraging process intelligence and agentic execution, organisations can move beyond fragmented and reactive operations to build a synchronised and self optimising value chain that continuously senses, decides, and acts with agility.
Resilience today has to be built for a world where volatility is structural, not episodic. It means moving away from dependence on single source and building diversification across geographies, suppliers, and products. We are seeing a shift towards domestic sourcing, but resilience also requires recalibrating business models when costs rise and pricing power is limited. It is about creating options before disruption forces decisions.
Relation building with supplier will be crucial. In an environment of supply scarcity, suppliers will have to make deliberate choices about who they serve, prioritise customer relationships. Long term, relationship‑based partnerships will matter more than transactional arrangements. At the same time, companies will need to balance diversification with predictability in their supply chains to ensure continuity in an uncertain operating environment.
India’s global journey is entering a new phase, where scale alone will not define success. With exports nearing USD800 billion and over 1,700 GCCs driving core business decisions, India is becoming more deeply integrated into global value chains.
As companies expand globally, the focus is shifting towards innovation, agility and higher standards of execution and compliance. Supply chains are becoming more strategic, and partnerships are emerging as key enablers of faster, more effective market entry.
The next generation of Indian multinationals will be built on strong execution, innovation-led differentiation and the ability to collaborate across markets. This is where India has the opportunity to move from being part of global value chains to shaping them.
India's exports nearing $800 billion grow 6% amid turbulence, with Asia central to leadership strategy; GCCs evolve from processing to strategic integration in overseas decision-making. Scale alone insufficient, robust supply chains, innovation partnerships, and sustainable long-term relationships drive effective global growth.
- S Sathish
- Apaar Bhatnagar
Semiconductor lifecycle is notoriously measured in years and billions of dollars. If India is to secure a meaningful position in the global semiconductor value chain, the focus must shift from chasing multi‑decade benchmarks to compressing product‑level lifecycles and time‑to‑impact.
A winning playbook starts with a bold north star and a clear‑eyed assessment of gaps - limited system & architecture design depth, nascent FAB & OSAT capabilities, a thin equipment backbone, and fragmented infrastructure.
From there, success hinges on making deliberate where‑to‑play choices: end‑markets aligned to India’s demand momentum (AI infra, EVs, power electronics, renewables), focused material bets (Si vs. compound), pragmatic node strategies (28/40 nm), and a margin accretive product mix.
Execution will matter more than intent - anchored by home‑grown champions, world‑class talent, tightly integrated clusters, deep industry‑academia‑startup partnerships, and consistent, enabling policy.
In semiconductors, scale follows focus - and speed creates advantage
Nilachal Mishra
Partner and Head, Government & Public Services (G&PS), National Leader - Government and Infrastructure
KPMG in India
India has built a powerful foundation as the world's largest economy, with growth above 7% and a sharp rise in public investment. Falling logistics costs, stronger banks, and world‑class digital infrastructure are reshaping our economic landscape. But the next phase is about quality of execution.
Our challenge now is to convert this momentum into Viksit Bharat,, powered by the right talent, deeper manufacturing capabilities, rising Tier 2 and Tier 3 cities, a vibrant MSME ecosystem, and a focused push on sunrise sectors such as semiconductors, AI, and critical minerals.
Snehasis Batabyal
Partner, C&O-Commercial-M&M
KPMG in India
Rare Earth Elements and Permanent Magnet supply chains are central to electric mobility, renewable energy, and advanced technologies. To secure our future, there is an urgent need to scale domestic processing, build integrated industrial clusters and tighten industry–research collaboration. These actions are essential to reduce import dependencies and create strong, resilient supply chains that keep India ahead.
Creating the future of industrial operations means moving from hardware-bound systems to software-defined automation and robotics which enables flexibility, scalability, being data-driven, and connected. This is the need of the hour to scale up Indian manufacturing ecosystem.
- S Sathish
- Neeraj Bansal
- Manoj Kumar Vijai
- Purushothaman KG
- Mohit Bhasin
- Naveen Aggarwal
The Budget clearly underscores its commitment to sustaining India's manufacturing momentum while fortifying the supporting ecosystem and infrastructure. These initiatives will substantially elevate India’s standing as a strong manufacturing nation globally.
Budget 2026 boosts India’s growth framework with a INR12.2 lakh crore capex outlay (+9%), strengthening infrastructure across transport, energy and digital systems while supporting innovation‑led manufacturing.
Backed by a INR10,000‑crore MSME Growth Fund and targeted export measures, these investments aim to lift productivity and attract private capital. Fiscal stability is maintained, with the FY26 deficit revised to 4.4% and the FY27 estimate at 4.3%.
Budget 2026 is ambitious and timely. As India accelerates infrastructure, manufacturing, and AI-led growth, the real differentiator will be how well governance, risk management, and accountability are embedded into execution - not treated as afterthoughts.
The Budget 2026-27 sends a decisive signal to global investors. By providing a long‑term tax holiday for foreign cloud service providers using Indian data centres, expanding the India Semiconductor Mission into a more integrated ISM 2.0, and deepening incentives for electronics and component manufacturing, India has placed digital infrastructure at the heart of its investment agenda.
These measures sharply reduce the cost of operating at scale, derisk long‑term capital commitments and strengthen India’s position in global technology supply chains. Together, they are likely to catalyse a new wave of high‑quality FDI into data infrastructure, semiconductor design and manufacturing ecosystems, and cloud‑led digital services -positioning India as a preferred hub for future‑ready global investments.
The forward-looking measures signal robust momentum for India's economy. Here are few key takeaways from my perspective that shall fuel economic growth:
- A budget to further boost manufacturing led economic growth with special emphasis on sports goods, white goods and electronic components manufacturing scheme shall position India as a global hub for strategic sectors.
- The Startup India Fund of Funds 2.0 will supercharge innovation and resilience, enabling scale-up in high-potential ventures especially in deep-tech innovation.
India has made real progress in raising manufacturing as a share of GDP, but our next leap depends on:
- building strength in component manufacturing,
- connecting last mile infrastructure, and
- easing financing pressures on exporters.
This is the moment for India to rethink what it will take to become a true global manufacturing hub and act with clarity and speed.
We are operating in a global landscape defined by persistent uncertainty - geopolitical realignments, climate pressures, technological disruption and shifting capital flows. Within this environment, nations that can adapt, execute, and inspire confidence will shape the future. India is actively re-shaping its opportunities within this uncertainty - not reacting to it but leveraging it. By expanding market access, deepening regional and minilateral partnerships, and building agile trade frameworks, India is scaling manufacturing, accelerating frontier technologies and strengthening global supply-chain integration.
- S Sathish
- Jeffry Jacob
- Nikhil Patil
India has made significant progress in reshaping its manufacturing landscape over the past decade, but deeper technological and ecosystem transformation is needed to compete with global leaders. While the top quartile of Indian manufacturers shows reasonable capability, a significant portion of companies are far below the desired digital maturity. Without widespread adoption of Industry 4.0, automation and AI-enabled systems, India risks losing competitiveness to countries that scaled digitalisation much earlier.
Jeffry Jacob
Partner and National Sector Leader - Automotive, Industry Group Leader - Chemicals
KPMG in India
Reimagining global manufacturing & supply chains in a disrupted world - Resilience, agility & strategic autonomy
Resilient supply chains aren’t built on infrastructure or technology alone, they are built on collaboration, smart capital choices and adaptable talent. As India strengthens its position in global manufacturing, innovation, advanced digital tools, and artificial intelligence will drive the next wave of transformation. The next disruption may look different, but the ability to pivot quickly and collaborate effectively will remain the winning mantra.
Nikhil Patil
Partner, C&O-Commercial-CM&LS
KPMG in India
The India advantage in scale, cost, and capability for the world
India has always had the ingenuity and talent; what has changed is the alignment of global demand, domestic modernisation and a greater appetite for investment in capability. However, India cannot claim global competitiveness unless its tier-2 and tier-3 suppliers rise on quality, compliance, and technology.
- Ummehaani
- Sumit Kapoor
Third-Party Risk Management (TPRM) has traditionally been fragmented and siloed across departments, sometimes reduced to check-in-the-box compliance. As supply chains are more interconnected and interdependent today, by integrating ESG, regulatory, reputational, cyber and financial risk parameters into a unified framework, organisations can move from reactive to predictive risk management. However, challenges remain: data quality and availability, integration with legacy systems, regulatory compliance and explainability, and change management. Overcoming these hurdles with Artificial Intelligence makes it possible to connect the dots across all risk types, so companies can stop playing catch-up and start leading with confidence, trust, and adaptability.
Businesses today face rapid, unpredictable changes: new products, regulatory shifts, talent competition, ESG, and tech transformation. The pace of “unknown unknowns” or “Black Swan events” is accelerating at an unprecedented pace. Naturally, traditional risk models find it difficult to keep up with that pace as they assume stability and predictability in businesses and operating landscape. AI is emerging as a new risk nervous system helping with fraud detection, cyber defence, supply chain resilience and more. Future operating model of risk management must consider the four-dimensional lens of probability, severity, interconnectedness, and velocity; which helps with real-time intelligence and simulation of multiple futures.
At KPMG we continue to assist our clients stay ahead of the curve through our AI led risk management capabilities – converting noise to signals and doubts to trust.
India’s edge in the semiconductor race goes beyond incentives. The government is steadily building an ecosystem by investing in skilling, enabling infrastructure, and ensuring policy stability. Competitiveness will rest on ecosystem depth and the ability to deliver with speed and consistency. Early wins in packaging and design give confidence we are moving in the right direction.
The Indian automotive Industry has a massive opportunity in harnessing sustainability-led growth. The Indian automtive This can open new markets and increase export penetration in others. A low-carbon manufacturing push can drive huge growth and acceleration.
Geopolitical shifts are forcing CFOs to rethink supply chain architecture. From satellite facilities to optionality in logistics, the focus is shifting from scale to agility. CFOs must lead with long-term commitment, especially in volatile global environments. India’s strength won’t come from competing on cost; it will come from engineered products, process innovation and logistics. Risk management, scenario planning and treasury coordination are now central to financial leadership.
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Sources:
* Invest India, accessed on 5 April 2024
- Invest India and Make in India, accessed on 21 May 2026
- Report on Production Linked Incentive Scheme for Large Scale Mobile and Component Manufacturing by Ministry of Electronics & Information Technology, Government of India, September 2021, accessed on 21 May 2026
- Press Information Bureau, Ministry of Textiles, accessed on 21 May 2026
- Invest India report Inside India Production Linked Incentives Schemes: White Goods
- Production Linked Incentive Scheme for Food Processing Industry, accessed on 21 May 2026
- Nine PLI schemes have been approved by the cabinet so far, Ministry of Commerce & Industry, accessed on 21 May 2026
- India’s Ease of Doing Business Performance Strengthened, Press Information Bureau, Ministry of Commerce and Industry, 10 February 2026, accessed on 26 May 2026
- DPIIT, 30 April 2026, accessed on 26 May 2026
- GTRI, 25 December 2025, accessed on 26 May 2026
Note to readers: We have relied on secondary sources, which are considered reliable, but have not independently verified the data. KPMG shall not be liable and/or responsible for any reliance placed on the content of the website.
KPMG in India contacts
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