Maruti Suzuki MD Explains Why India Has Right Conditions To Become Global Manufacturing Hub

Maruti Suzuki Managing Director and CEO Hisashi Takeuchi has said that India could emerge as the world’s next big manufacturing centre, with the potential to even surpass China’s dominance over the coming decades. Speaking at the Automotive Component Manufacturers Association’s annual convention, he argued that policy stability, demographic advantages, and indigenous innovation create a unique opportunity for the country to take a leadership position in global production.

From Past Powerhouses to India’s Turn

Takeuchi placed India’s opportunity in a wider historical arc. He noted that every few decades, a new country or region emerges as an economic powerhouse. America led through the early industrial period, Europe rebuilt itself post-war, Japan demonstrated manufacturing excellence in the late 20th century, the Asian Tigers rose during the 1990s, and China has held global dominance in manufacturing for more than three decades. According to him, India now has the right mix of conditions to become the next hub.

Those conditions include the world’s largest working-age population and a rapidly growing four-trillion-dollar economy. Domestic market depth adds resilience, and policy frameworks like Production Linked Incentive schemes, Make in India, and Atmanirbhar Bharat are designed to push manufacturing further.

At the same time, challenges remain. Tariff pressures from the United States are already affecting component exports. Around 30 percent of shipments now face tariffs of 25 to 50 percent, raising costs and creating uncertainty. While Takeuchi expressed optimism that government-level talks may resolve some of these issues, they remain a major obstacle to growth.

Suzuki’s EV Bet Highlights Confidence

Suzuki’s own investment decisions reflect confidence in India as a manufacturing base. The company has chosen India as the global hub for its first electric vehicle, the e-Vitara, which will be exported to over 100 countries. Except for some raw materials that are not available locally, the car is being built entirely in India, right down to newly added electrode manufacturing for EV batteries.

The broader auto sector offers numbers to back the claim. Auto component exports touched 23 billion dollars in FY25 and could double by 2030. India is now the third-largest automobile market globally, offering both production scale and consumer sophistication.

But the sector also faces real hurdles. Margins for suppliers are tight, and the shift to electrification requires fresh investment in batteries and new technologies. Global competitors, including China and South Korea, already have established supply chains in these areas, making the transition costlier for Indian firms.

Policy Stability Could Make or Break It

Takeuchi repeatedly underlined the importance of consistent policy. Drawing on Japan’s post-war rise, he argued that predictable governance, steady investment in R&D, and long-term commitment to customer-focused innovation were essential for building trust and capability. Without these, companies may hesitate to commit significant resources to India.

There are also issues at the state level. While central policies are supportive, infrastructure quality, power reliability, and regulatory clarity vary widely across regions. Investors often complain about land acquisition bottlenecks, delayed clearances, and inconsistent enforcement. These gaps can dilute the advantages of policy intent at the national level.

Workforce Edge, But Execution Matters

India’s young workforce is often highlighted as a major strength compared to China, which faces an ageing demographic. The availability of technical education and widespread English language skills adds further value, particularly for knowledge-intensive manufacturing.

Technology adoption is also on the rise. The auto sector has embraced advanced manufacturing methods, quality management frameworks, and digital transformation tools. Companies like Suzuki apply Kaizen principles and continuous improvement practices to strengthen production efficiency. This alignment with global standards is a positive, though gaps in shop-floor automation and supply chain digitisation still remain in many parts of the industry.

Bigger Market, Smaller Risks

Takeuchi warned against dependence on single markets for exports. Recent trade frictions, pandemic-era disruptions, and incidents like the Suez Canal blockage exposed the fragility of global supply chains. He argued that India must broaden its geographic footprint and not rely too heavily on one or two destinations.

Here, India’s domestic scale provides a cushion. With a large home market, the country is less vulnerable to external shocks than smaller export-driven economies. Yet even domestic resilience has limits. A slowdown in consumer demand, higher interest rates, or inconsistent fuel and emissions policies could temper growth momentum.

The optimism is not confined to the automotive sector. Multinationals across industries are actively evaluating India as a production base, attracted by cost competitiveness, a skilled workforce, and improving infrastructure. However, they continue to weigh these positives against issues like logistics costs, legal complexities, and unpredictable tax enforcement, which have been deterrents in the past.