India is gradually emerging as a powerhouse in global manufacturing and sourcing. A strong industrial base, skilled workforce, and commitment to sustainable manufacturing position the country to achieve a USD 7 trillion economy by 2030.

For senior business leaders considering investment or expansion, understanding the nuances of sourcing or procurement from the Indian market is essential. A critical component of this process is the search for a distribution partner, which ensures efficient market entry and sustainable growth.

This article examines the current state of sourcing and manufacturing in India, drawing on data from leading consultancies, and outlines best practices for successful market entry.

The growth trajectory of Indian Manufacturing

India’s manufacturing sector has demonstrated remarkable resilience and growth over the past few years. In 2023, India’s manufacturing output reached USD 455.77 billion, marking a 3.57% increase from the previous year.

The country’s industrial growth is underpinned by a strong domestic market, with 65% of business leaders citing domestic sales as their primary revenue source, while 29% anticipate increased turnover from global demand in the future. Such optimism signals India’s growing relevance as both a production hub and a strategic export base.

Industrial output growth remains robust, with the Index of Industrial Production (IIP) recording a 5% increase in January 2025, reflecting the sector’s ongoing expansion and resilience to global shocks. This upward trend is further bolstered by government initiatives such as ‘Make in India,’ which aim to position the country as a leading global manufacturing destination.

Sourcing Advisory: Navigating the Indian Market

Entering the Indian market requires a nuanced approach to sourcing advisory, given the diversity of suppliers, regulatory frameworks, and regional dynamics. While India offers a vast pool of suppliers, 58% of manufacturers still import intermediate products due to non-availability domestically, with cost and quality advantages also influencing sourcing decisions.

However, a significant 35% of industry leaders are optimistic about reducing import dependence in the coming years, indicating a shift towards greater self-reliance and local sourcing.

For international businesses, leveraging local sourcing advisory services can streamline supplier identification, risk assessment, and compliance management. These experts provide invaluable insights into supplier capabilities, quality standards, and negotiation strategies, ensuring that sourcing or procurement from the Indian market aligns with global best practices.

Digital transformation and procurement trends

India’s manufacturing sector has consistently embraced digital transformation. According to a report, 86% of Indian CEOs now prioritize investment in emerging technologies, like big data and predictive analytics, while 63% focus on sensors and Industrial Internet of Things (IIoT). This digital shift is enhancing operational efficiency, quality control, and supply chain transparency, which are key factors for global investors seeking reliable sourcing partners.

The global procurement as a service market, of which India is a significant player, is projected to grow at a CAGR of 11.8% from 2025 to 2032, reaching USD 17.17 billion by 2032. Moreover, businesses adopting advanced cloud-based procurement services have reported cost reductions of up to 25% by availing external expertise in procurement strategies.

Analysis of India’s Vendor Management Excellence

As per a report, 81% of organizations plan to increase their outsourcing efforts in the next three to five years, with India being a preferred destination due to its scalable services sector and robust policy framework. Strategic supplier collaborations in India have resulted in annual cost savings of 10-25%, with mature outsourcing firms achieving even higher efficiencies.

Moreover, the focus is shifting from cost savings to strategic alignment, with 28% of organizations citing better alignment with business strategy as the primary driver for outsourcing. This transition is facilitated by advancements in AI, automation, and digital transformation, enabling companies to outsource complex functions such as supplier evaluation and product development.

Integrating the critical role of Distribution Partner Search

A successful India entry strategy hinges on the effectiveness of the distribution partner search. Selecting the right distribution partner is vital for optimizing market reach, ensuring efficient product delivery, and building a resilient supply chain. The Indian market offers a diverse array of distribution channels, including independent distributors, direct sales, retailers, wholesalers, and resellers.

Key considerations in the distribution partner search include:

●   Market Knowledge: Assessing the partner’s understanding of local market dynamics and customer preferences.

●   Logistical Capabilities: Ensuring the partner has robust infrastructure and networks for timely delivery.

●   Reliability and Alignment: Verifying the partner’s track record and alignment with your business objectives.

●   Due Diligence: Conducting thorough quality assessments and background checks to mitigate risks.

Consulting firms specializing in distribution partner search in India provide structured research, background verification, and strategic recommendations, ensuring that foreign firms make informed decisions and establish strong, long-term partnerships.

Sourcing or Procurement from the Indian Market: Opportunities and Challenges

India’s vast supplier base, competitive costs, and improving quality standards make it an attractive destination for sourcing or procurement. However, challenges remain, including regulatory complexities, regional disparities, and the need for rigorous supplier vetting.

The adoption of procurement as a service and digital procurement platforms is helping businesses overcome these hurdles. Simultaneously, India’s procurement consulting market is also evolving, with advisory firms offering tailored solutions to help businesses innovate and gain a competitive edge. These services are instrumental in navigating the complexities of supplier selection, contract negotiation, and compliance management.

India Market Entry: Tecnova Consulting for Sourcing & Procurement

The dynamic manufacturing and sourcing ecosystem within India allows compelling opportunities for global investors. However, success hinges on a well-executed distribution partner search, robust sourcing advisory, and a deep understanding of local market dynamics.

At Tecnova, we specialize in providing end-to-end India entry solutions for international businesses. Our expertise lies in tailoring strategies that align with the unique dynamics of the Indian market, ensuring seamless expansion and sustainable growth. Here's how we support global organizations:

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India Market Entry Strategy Development

We help businesses assess market potential, competitive landscape, and regulatory frameworks to build a customized India entry roadmap.

• In-depth market research & feasibility studies
• Business model evaluation (JV, WOS, partnership, etc.)
• Strategic recommendations tailored to sector and geography

Sourcing & Procurement Consulting

Tecnova supports companies in identifying reliable Indian suppliers and optimizing procurement operations to reduce costs and enhance supply chain efficiency.

• Supplier identification and due diligence
• Cost benchmarking and contract negotiations
• Vendor consolidation and supply chain optimization

Distribution & Channel Partner Search

We help international businesses establish effective sales and distribution networks across India by finding the right partners.

• Identification of potential channel/distribution partners
• Evaluation based on capabilities, reach, and alignment
• Negotiation support and onboarding strategy

Regulatory & Compliance Advisory

Understanding and navigating India’s regulatory landscape is crucial. Tecnova ensures complete compliance from day one.

• Assistance with business registration and legal structuring
• Compliance with FDI norms and sector-specific regulations
• Taxation, licenses, and environmental clearances

Operational Setup & Incubation Support

We manage the practical aspects of setting up operations in India, offering both short-term incubation and long-term infrastructure support.

• Temporary incubation facilities (office, staff, admin)
• Recruitment, HR, and payroll support
• Location analysis and facility setup coordination

Post-Entry Growth & Expansion Support

Tecnova continues to support companies even after market entry by optimizing their performance and facilitating long-term growth.

• Expansion into new geographies or verticals
• Performance monitoring and local management advisory
• Business development and government liaison

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By leveraging our expert guidance and local insights, your organization can unlock the full potential of India's industrial landscape and achieve long-term success.