# New manufacturing hotspots are emerging in Southeast Asia and India

- Link: https://www.thailand-business-news.com/business/153156-new-manufacturing-hotspots-are-emerging-in-southeast-asia-and-india
- Published: 2025-08-10T15:54:40+07:00
- Author: Zhang Fang

The shift away from China in manufacturing is being led by high-growth industries
like renewable energy and electric vehicles (EVs), with Thailand attracting significant
investment in EV production.

 * High-growth industries like renewable energy and electric vehicles are driving
   the shift away from China, with Thailand attracting investment in EV production.
 * Government incentives and free trade agreements are enticing manufacturing firms
   to relocate from China to countries like India and Southeast Asia.
 * Lower costs for land, construction, and labor in emerging markets like India 
   and Southeast Asia are making them attractive manufacturing locations compared
   to China.

While China holds the lion’s share of manufacturing FDI in the region, the gap is
narrowing. Indonesia raked in $28.7 billion in investment last year, up $4 billion
from the year earlier. Vietnam’s FDI in manufacturing climbed over 30% to hit $23.5
billion, [according to JLL](https://www.jll.com.hk/en/trends-and-insights/research/asias-next-manufacturing-powerhouse).

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Peter Guevarra, Director of Research Consultancy, Asia Pacific at JLL, explains 
that the shift in manufacturing base beyond China is driven by the desire to diversify
and create more resilient supply chains. This move offers companies multiple advantages
by reducing vulnerability to geopolitical tensions and potentially boosting supply
chain efficiency by locating closer to Southeast Asia, one of the world’s fastest-
growing regions.

Rising costs for land, construction, and labor in China are increasingly favoring
other emerging markets, where costs are often nearly half as much.

Manufacturing wages in India are less than half of China’s, with workers earning
$2 per hour compared to China’s $5.58. [JLL data shows](https://www.jll.com.hk/en/trends-and-insights/research/asias-next-manufacturing-powerhouse).

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Government incentives, such as India’s production-linked incentive scheme and free
trade agreements like the ASEAN Free Trade Area, are further encouraging the move.
Rising costs in China and significantly lower manufacturing wages in emerging markets
like India are also contributing to the shift.

High-growth industries like renewable energy and electric vehicles (EVs) are leading
the shift away from China, according to Michael Ignatiadis, Head of Manufacturing
Strategy, Asia Pacific, JLL. Thailand, a well-established automotive powerhouse,
is now seeing increased investment in EV production driven by global demand. Chinese
EV giant BYD invested 17.9 billion baht ($500 million) to establish a new facility
in Thailand to produce 150,000 EVs annually starting this year. In January, Chinese
car manufacturer Great Wall Motor also started producing its Ora EV at its factory
in Rayong, Thailand.