Key Highlights
- India ranks 6th out of 11 Asian economies in the 2026 Asia Manufacturing Index.
- The index assesses competitiveness across eight pillars, including economy, policy stability, and innovation.
- China remains the leader, while Malaysia advances to second place, overtaking Vietnam.
- India’s large domestic market and growing labour pool are strengths, but slower policy execution hampers its climb.
- Future improvements will depend on faster reforms, logistics upgrades, and technology adoption.
Detailed Insights
The 2026 Asia Manufacturing Index, compiled annually by Dezan Shira & Associates, juxtaposes the manufacturing readiness of major Asian nations using a framework of eight macro‑pillars and 43 sub‑indicators. India’s placement at six places it squarely in the middle of the regional hierarchy. While the nation benefits from a sizable internal market, expanding infrastructure projects, and an increasingly skilled workforce, it lags behind the top‑ranked economies in terms of policy certainty, execution velocity, and depth of innovation ecosystems.
China retains the premier position, leveraging its massive production scale, robust logistics network, and tightly integrated supply chains. Malaysia jumps to second place for the first time, pushing Vietnam to third. Singapore, representing the developed‑economy cohort, moves to fourth, surpassing South Korea, which falls to fifth. These movements illustrate a rapidly intensifying contest for manufacturing leadership in Asia, driven by aggressive policy reforms and infrastructure investments.
For India to ascend the ranking, analysts underscore the need for a more streamlined business environment, heightened ease of doing business, accelerated skill‑development programmes, and broader adoption of advanced manufacturing technologies.
Key Concepts
- Asia Manufacturing Index (AMI): An annual, data‑driven ranking that evaluates the manufacturing competitiveness of Asian economies across eight pillars and 43 detailed metrics.
- Policy Stability: The consistency and predictability of government regulations that affect long‑term investment decisions.
- Innovation Depth: The extent to which a country supports research, development, and the diffusion of new technologies within its manufacturing sector.
- Logistics Efficiency: Measures of how swiftly and cost‑effectively goods can be moved through a country’s transport and supply‑chain infrastructure.
- Ease of Doing Business: A composite indicator reflecting regulatory simplicity, procedural transparency, and the overall business climate.