Industry Geography of Indian  - developing supplier network

In 2015, India’s economy became the world’s fastest growing major economy in the last quarter of 2014, surpassing China. Export industries played a big role in this outcome, with India slowly becoming an export superpower for a large range of products. What’s the best way to find Indian suppliers for your product categories?

To source in India, you should think in terms of clusters, even more so than in China. This concept has been part of India’s rich industrial history and manufacturing landscape for several centuries already. A cluster could be defined as a concentration of enterprises producing same or similar products and located in a contiguous geographical area (a city, a town or few adjacent villages). Some Indian clusters are so important that they can account for over 90% of India’s total production for this product. Let’s have a look at some of the most prominent consumer goods in Indian exports and clusters.

Handicraft

Representing over $4 billion worth of exports, handicrafts items are playing a significant role in the developing country’s economy and especially for rural areas. Main handicrafts exports include art, metal ware, woodwork, and embroidery. Most suppliers have less than 10 employees, making it harder to source from them without directly visiting the clusters. Below is a table of main clusters by handicraft categories.

Garment and footwear

The textile sector is one of the oldest industries of the country. Today, it directly employs over 40 million workers and represented $40 billion worth of total exports in 2016, making India one of the top 10 export countries and accounting for around 4% of global exports.

The industry has two broad segments, one unorganized and one more organized. The unorganized sector operates on a small scale with traditional tools and methods, with very limited marketing and production abilities. As such it may not be of interest for international buyers. The second one may be of more interest, because of its more organized structure with modern machinery, its updated techniques and vast factories.

Regarding the type of textiles produced, India is the first jute production maker and 2^nd exporter worldwide (especially interesting for accessories and bags), second in silk and cotton production.

Below is a map which displays textile clusters, according to material used.

Jewelry

According to the provisional data by Gems and Jewelry Export Promotion Council (GJPEC), the total exports of Gems and Jewelry in 2012 stood at $39 billion in India, making it one the top export industries for the country. It is a leading foreign exchange earner and also one of the fastest growing industries in the country.

The two major segments of the sector in India are gold jewelry and diamonds with gold jewelry, which form around 80 percent of the jewelry market.

Jewelry is one of the perfect examples of the importance of clusters in the country. Indeed, almost the all of the gems and jewelry exports are from the clusters of Gujarat and Mumbai. On the one hand, the majority of raw gold material arrives in the Mumbai cluster to be transformed thanks to the considerable number of modern, semi-automatic factories and laser-cutting units. On the other hand most of the diamond processing takes place in Gujarat region (especially Surat), representing over 80% of the total diamonds processed in India.