6 Tips for Transferring Production to South Asia

South Asia's evolving manufacturing sector offers enticing possibilities for businesses to diversify their supply chains. However, navigating the region’s complex regulations, customs, and compliance can trip up even experienced logistics professionals.

A recent Expeditors LinkedIn poll revealed that navigating regulations, customs, and compliance is the biggest hurdle for logistics professionals when transferring production to South Asia. While factors like infrastructure, manpower, and manufacturing incentives play a role, mastering the regulatory landscape is paramount for a smooth transition.

Through our decades-long experience in South Asia, we have seen successful organizations apply the following six attributes to their South Asian supply chains:

1. Local Expertise: Each South Asian nation has unique customs regulations. A one-size-fits-all approach simply does not work. Partnering with a global freight forwarder with deep local knowledge of your target country is crucial. Experts can guide you through the intricacies of customs documentation, duty calculations, and import/export procedures, saving you time and frustration.

2. Embrace Technological Solutions: Many South Asian countries are implementing digital customs clearance systems. In this area, the nations in ASEAN are coming together to provide companies with consistency. Familiarize yourself with these platforms to expedite the clearance process and minimize delays. Investing time in understanding these systems and integrating them into your operational procedures can significantly improve your supply chain efficiency.

3. Plan for Disruptions: It could be the weather, social unrest, or plain old congestion at nodes simply not built to process the growing volumes of freight. You should anticipate potential bottlenecks, longer clearance times, etc., and factor these delays into your logistics lead times. By planning ahead, you can adapt your supply chain to shifting circumstances.

4. Logistics Infrastructure: The region has some bright spots for logistics infrastructure. However, it does not have the uniformity or consistency of mainland China. Understanding regional limitations, such as limited cold chain capabilities in some areas, will help you choose the most suitable production location for your specific needs.

5. Skilled Manpower: Partnering with a local logistics provider can also help you navigate labor regulations and ensure worker safety, a critical aspect of any ethical and sustainable operation.

6. Manufacturing Incentives: Some South Asian nations offer manufacturing incentives that can significantly reduce production costs both in the short and medium term. However, understanding the eligibility criteria and compliance requirements for claiming these incentives is essential.

Read the full article to learn about transferring production to South Asia.

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