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    Sourcing Comparison Guide

    India vs Vietnam: Manufacturing Sourcing Comparison 2026

    Both India and Vietnam are top China+1 alternatives, but each excels in different categories. This guide compares costs, capabilities, trade benefits, and logistics to help you choose the right manufacturing partner.

    By Sanjay Sachdev, Partner & Head of Sourcing ยท Updated March 2026 ยท 30+ yrs sourcing

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    Head-to-Head Comparison

    Factor๐Ÿ‡ฎ๐Ÿ‡ณ India๐Ÿ‡ป๐Ÿ‡ณ Vietnam
    Labor Costโœ… $1.50-$3.00/hr$1.80-$3.50/hr
    EU Trade AgreementGSP (under negotiation)โœ… EVFTA (0% duty)
    US Trade AccessStandard MFNStandard MFN
    Product Diversityโœ… 50+ categories10-15 core categories
    Textiles & Apparelโœ… Own cotton, vertically integratedImports 70%+ fabric
    ElectronicsGrowing (mobile, EMS)โœ… Established (Samsung, LG)
    Chemicals/Pharmaโœ… World leader (generic pharma)Limited
    Leather/FootwearOwn raw material, artisan skillsNike/Adidas scale operations
    Scale CapabilityMassive (but fragmented)Medium (concentrated)
    InfrastructureImproving rapidly (NIP investment)Good (industrial parks)

    ๐Ÿ‡ฎ๐Ÿ‡ณ Why Source from India

    • Larger domestic market (1.4B population) creates deeper supplier ecosystems
    • Raw material self-sufficiency โ€” cotton, leather, iron ore, chemicals
    • 50+ diverse manufacturing categories vs Vietnam's narrower focus
    • Strong pharmaceutical, chemical, and engineering manufacturing
    • English-speaking workforce โ€” easier communication for Western buyers
    • Growing trade agreements: AI-ECTA (Australia), bilateral negotiations with EU/UK
    • Lower cost for textiles, handicrafts, jewelry, and leather goods

    ๐Ÿ‡ป๐Ÿ‡ณ Why Source from Vietnam

    • CPTPP and EVFTA trade agreements โ€” duty-free to EU, Japan, Canada, Australia
    • Strong electronics and footwear manufacturing (Samsung, Nike, Adidas)
    • Better FDI infrastructure with industrial park model
    • Closer proximity to China โ€” easier supply chain integration
    • Lower import tariffs from ASEAN partners
    • Government efficiency and faster business setup

    Our Verdict

    India is the better choice for textiles, chemicals, pharmaceuticals, handicrafts, and engineered products โ€” categories where India has raw material advantages and deep expertise. Vietnam excels in electronics assembly, footwear (for major brands), and furniture for buyers targeting EU/Japan with duty-free access. For US-bound sourcing, India and Vietnam are comparable โ€” choose by product category. The ideal China+1 strategy often uses both countries.

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