China Holds Top Spot, India at 6th: What the Asia Manufacturing Index 2026 Reveals Is A Red Flag For ‘Make In India’ | World News

New Delhi: India’s push to emerge as Asia’s next manufacturing hub has received mixed reactions. The Asian Manufacturing Index 2026 placed the country sixth among 11 major Asian economies. The ranking reflects progress, but also points to the limits of the current system.

In the 2024 edition of the index, India ranked fourth among eight countries. Last year the country ranked sixth. The report says stronger infrastructure and simpler tax rules are necessary if India wants to move closer to the top and attract large-scale global manufacturing.

China continues to maintain its top position in Asia’s manufacturing ecosystem. Beijing is the first choice of global manufacturers due to its scale, efficiency and supply chains.

Malaysia has made a move this year, moving up to second place, overtaking Vietnam, which is currently in third place; It is followed by Singapore in fourth place and South Korea in fifth place. Indonesia ranks seventh and Thailand ranks eighth.

The index was prepared by Dezan Shira and Associates. It evaluates production power using eight broad measures. These include the economy, political risk, business environment, international trade, tax policy, infrastructure, workforce and environmental, social and governance standards.

India is showing strength in terms of labor availability and a growing domestic market. A large labor pool continues to attract global attention. Government initiatives such as the production-linked incentive scheme have increased investments in the electronics and pharmaceutical sectors. These sectors have seen increased factory activity and foreign interest.

Weakness in physical infrastructure is evident. India lags behind countries such as China and Singapore in this regard. Perceptions of corruption and institutional stability also lowered scores. High logistics costs and complex tax compliance continue to put pressure on manufacturers.

The report emphasizes that corruption and political risk are areas of concern. India lags behind many rival countries in terms of transparency. Singapore is seen as the most stable and predictable environment in this category. Simplifying regulatory processes is seen as essential for the long-term success of domestic production initiatives.

India has set a target of creating a trillion-dollar manufacturing economy by fiscal 2026. The report recommends a shift that goes beyond relying solely on workforce availability. A greater focus on skills development and digital infrastructure appears essential for future growth.

Lower logistics costs could change India’s position in the coming years. Improved transportation networks and faster customs clearance could allow India to more strongly challenge Vietnam and Malaysia. The way forward requires reforms, faster implementation and sustained policy clarity.