As trade constraints, economic challenges and growing geopolitical tensions make China less appealing as a single manufacturing base, multinational corporations are increasingly attempting to diversify their supply chains by moving operations to India.
The Asia CEO of VinFast, a Vietnamese electric vehicle manufacturer, stated on Monday that the firm is in discussions with a number of component manufacturers in an effort to increase its sourcing from India.
On the occasion of the opening of its Indian facility in the southern city of Thoothukudi, VinFast Asia CEO Pham Sanh Chau told Reuters that the company is in talks with a number of its current component suppliers and some of them wish to move a portion of their production to the Indian industrial park.
Vietnam-based automotive major VinFast is all set to for the roll out of its first car from the VinFast India EV manufacturing facility at Thoothukudi in Tamil Nadu. TN CM @mkstalin is inaugurating the $2 billion facility on Monday.
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— businessline (@businessline) August 4, 2025
VinFast Inaugurates India First EV Factory in Thoothukudi
VinFast, a Vietnamese EV manufacturer, has inaugurated its first manufacturing plant in Thoothukudi, Tamilnadu, as part of a larger $2 billion expansion strategy for India. The first phase involves $500 million investment over five years, looking at an annual production capacity of up to 150,000 vehicles, starting with 50,000 in the first year. The factory is expected to create 3,000 to 3,500 jobs locally and serve both domestic and export markets in Sri Lanka, Nepal and Mauritius. SUV models VF 6 and VF 7, unveiled at the Bharat Mobility Global Expo 2025, will be assembled here and rolled out to Indian showrooms in the coming weeks. The planta is being positioned as an emerging export hub due to its proximity to the Thoothukudi port.
Local Sourcing Strategy Goes into High Gear
On the day of the inauguration, VinFast announced the advanced discussion status with several component suppliers, some of which might relocate into this new industrial park in Thoothukudi. VinFast Asia CEO Pham Sanh Chau stated that both Indian suppliers and a Vietnamese plastics producer are discussing the possibility of co-locating production alongside the vehicle assembly line.
The move is in sync with global supply chain diversification, as companies reduce sourcing from China due to geopolitical tension includes and cost issues. Prior local sourcing will assist reduce costs and improve logistics, supporting India “Make in India” objectives.
