India in pole-vaulting distance to oust China as world's factory: Mahindra

Anand Mahindra, chairman of Mahindra Group, said on Friday that ongoing geopolitical tensions with China were nudging many manufacturers towards India. The country is now within 'pole-vaulting distance' to take over China as the world's leading manufacturing hub.

"China's geopolitical tensions are driving many manufacturers in India's direction. However, that's not the sole factor. Economics also plays a part. India boasts the lowest manufacturing costs globally. It's hardly surprising that lately, companies of the caliber of Apple, Samsung, Boeing, and Toshiba have relocated a substantial portion of their manufacturing operations to India," Mahindra stated at the 77th Annual General Meeting of the company.

He went on to highlight that not only Western nations but also countries like Singapore, are heavily investing in India. "It's not just Western countries showing interest. Did you know that Singapore is the second largest investor in India? We are within striking distance of being able to supplant China as the world's factory," he elaborated.

Mahindra suggested that doubts surrounding China's ambitions and disruptions to supply chains in the wake of Covid-19 have also worked in India's favor. "We are well-positioned to capitalize on this. We have significantly improved our standing on the World Bank's Logistic Performance Index. Our focus on infrastructure is bearing fruit," Mahindra added.

During his address to shareholders, Mahindra also outlined an ambitious five-fold growth target for the company's businesses. "Every growth gem has taken up the 5X challenge - our businesses are set to grow five-fold in the next five to seven years from their current market cap. I am confident that we will witness a staggering pace of growth in the upcoming years," he asserted.

"We pledged to reach an 18 per cent Return on Equity (ROE) within three to five years. We achieved this milestone in just 18 months. We have recently declared the largest dividend in our history. Our share price has increased five-fold since the onset of the pandemic. It has indeed been a satisfying year," he concluded.