Economic Survey 2026: How Nashik luggage ecosystem beat European hubs

When Samsonite’s luggage factory in Nashik became the company’s largest production facility in the world by volume, overtaking long-established European manufacturing hubs, it offered a rare but powerful glimpse of what Indian industry can achieve when scale, supply chains and skills come together in one place. More than a corporate milestone, the Nashik example underscores a central argument of the Economic Survey 2025–26: global competitiveness is built through clusters, not isolated factories.

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India’s ambition to emerge as a globally competitive manufacturing hub will depend less on how many factories it sets up and more on where and how industrial activity is concentrated. The Survey argues that high-performing industrial clusters such as dense ecosystems of firms, suppliers, workers, logistics and institutions are the fundamental units through which countries integrate into global value chains (GVCs), attract foreign investment and drive productivity growth.


Drawing on international evidence, the Survey notes that countries which successfully plugged into GVCs did so by concentrating industrial activity in a small number of globally connected regions. China’s Greater Bay Area, occupying less than 1 per cent of land, generates around 35 per cent of exports and 11 per cent of GDP. Vietnam’s two principal economic regions account for nearly two-thirds of national GDP and trade while using just 11 per cent of land. The lesson is consistent: “Industrial activity needs concentration, connectivity, and a local environment that grants the freedom to compete and innovate.”

Clusters generate productivity advantages by co-locating firms, suppliers and workers within dense ecosystems. Shared infrastructure, deep labour markets, lower transaction costs and continual knowledge spillovers allow firms to scale faster and compete globally. The Nashik luggage ecosystem illustrates this dynamic in practice. Samsonite’s decision not only to locate but to expand further in Nashik reflects the presence of a reliable supplier base, skilled workforce and operational stability, the factors that increasingly outweigh lower-cost but fragmented locations.


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Despite such successes, the Survey notes that most Indian clusters remain domestically oriented and underscaled. Over the past few decades, India has launched multiple cluster-focused initiatives, from SEZs and industrial parks to national industrial corridors, but many have struggled to evolve into globally competitive ecosystems. Two structural constraints persist.

First, scale. Indian clusters are often small, land-constrained and weakly integrated with multimodal logistics networks, limiting their ability to participate in global production networks. Second, regulatory rigidity. Labour regulations, building norms and approval processes within industrial zones remain complex and unpredictable, reducing their appeal to international firms that value speed, flexibility and certainty.

“The gap between domestic strength and global competitiveness underscores the need for an upgraded cluster strategy,” the Survey argues. Rather than incremental fixes, it calls for reimagining clusters as high-productivity, reform-enabled ecosystems.

The proposed strategy rests on three pillars. The first is scale and location, anchoring large clusters in well-connected brownfield regions, supported by clear land titles and modern land-pooling mechanisms. The second is institutional empowerment. Drawing parallels with the International Financial Services Centres Authority (IFSCA) at GIFT City, the Survey suggests creating empowered governance frameworks that can deliver regulatory certainty and globally competitive operating norms. “Clusters need institutional agility to match global speed,” it notes.

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The third pillar is private execution, with a greater role for private developers in masterplanning, building and operating cluster infrastructure, allowing the state to focus on coordination and rule-setting rather than micro-management.

If executed well, the Survey suggests, such clusters could become India’s primary engines of export growth, innovation and employment. The Nashik example shows that India does not need to invent success from scratch—it already exists in pockets. The challenge now is to scale these successes into a coherent national cluster strategy capable of competing with the world’s best.