Localization Management Challenges and Domain-Specific AI Empowerment Strategies for Chinese Manufacturing Enterprises Expanding to India

Abstract

Against the backdrop of global supply chain restructuring and increasingly complex Sino-Indian relations, Chinese manufacturing enterprises expanding to India face three systemic challenges: high compliance costs, cross-cultural management conflicts, and local skill gaps. This study combines Dunning’s eclectic paradigm (OLI theory) with Kostova’s institutional distance theory, systematically puts AI in specialized fields into the three-dimensional institutional distance framework, and puts forward the concept of “digital L advantage”. We used mixed methods, including case study, system prototype development and benchmark testing, developed a BOM compliance RAG-AI prototype, and compared it with the general language model, and analyzed two cases, Transsion Holdings and Sany Heavy Industry. It is found that the core advantages of domain AI are professional evidence traceability, real-time regulation synchronization and audit accountability. Different industries should choose different AI entry points. Our AI solution, with a one-time investment of 80,000 to 150,000 RMB, can replace the traditional compliance scheme that costs 800,000 to 1 million RMB per year.