In recent years, the pandemic, the war in Ukraine, and supply chain tensions have exposed the vulnerability of European economies. Industrial reshoring has emerged as one of the strategies being explored to strengthen sovereignty. France, along with other EU member states, is multiplying initiatives to revitalize its industrial fabric. However, this still fragile movement must overcome several structural obstacles and be part of a long-term vision.
Reshoring to Reindustrialize: A Vital Challenge for France
The decline of industry, long masked by the rise of the service economy, revealed a major strategic vulnerability during the pandemic. Since then, through tax incentives, investment plans, and regulatory simplifications, the French government has sought to create the conditions for a revival.
A Historic Deindustrialization
Since 1975, France has lost over 2 million industrial jobs. The industry’s share of GDP fell from 21.8% to 10.7% in 2023. These figures, reported by the Economic Affairs Committee in February during a session on the loss of industrial sovereignty, highlight a decline that has weakened key sectors such as healthcare, energy, and defense.
Successive waves of offshoring have deepened dependence on imports of strategic goods. Sectors like pharmaceuticals are particularly exposed. In 2017, the European Medicines Agency noted that nearly 40% of medicines marketed in the EU came from third countries, and that 80% of active ingredients were produced in India or China.
A Renewed Political Commitment
To reverse this trend, the government has embraced an industrial reshoring strategy as a tool for economic resilience. These policies focus less on returning to mass industry than on supporting high-value-added sectors and building local ecosystems capable of adapting to new economic and environmental constraints. Reshoring is seen as a lever to reduce reliance on critical supplies and strengthen industrial sovereignty.
Early Successes and Emerging Signs
In healthcare, projects to bring active ingredient production back to France have been launched. In the textile sector, several French brands have reopened workshops to promote “Made in France”.
In logistics and packaging, various initiatives aim to strengthen industrial resilience and develop short supply chains. These include the production of sustainable containers and packaging for the agri-food and pharmaceutical industries, with objectives of creating local jobs and securing supply chains.
The Challenges of Industrial Reshoring in France
Despite the efforts made, industrial reshoring faces major structural challenges.
High Production Costs
Costs in France remain high compared to those in Asia or even Eastern Europe. However, it should be noted that lower costs are not the primary motivation for French companies developing production centers abroad. Proximity to the market and customers is often the main reason.
Nevertheless, higher costs limit the competitiveness of local production. A Bpifrance survey in 2022 revealed that only 5% of SMEs and mid-sized companies planned to reshore in the next five years. The sectors most involved in such initiatives are fashion and luxury, agri-food, and automotive.
Multiple and Persistent Obstacles
Slow authorization processes, scarcity of industrial land, and complex regulations hinder projects. Tax burdens and environmental constraints further delay implementation timelines. Labor issues and unfair international competition are additional barriers to deploying a comprehensive reindustrialization plan.
To make industrial reshoring viable, several solutions are emerging: site automation, robotics, in-house training, and increased support from local authorities. These levers could partially offset cost differences and accelerate projects.
Europe Confronting Its Vulnerabilities
The European Union has recognized its strategic dependencies and adopted a proactive approach.
A European Awakening
Emphasis has been placed on legislative tools to ensure the security of European industry’s supply chains. Regarding critical raw materials, the EU has adopted a framework to secure and diversify supply sources while aiming to produce more domestically.
In the semiconductor sector, with the Chips Act, the EU has set itself the ambitious goal of doubling its global market share by 2030. For clean technologies, the EU has endorsed the principle of reshoring part of production to Europe, with simplified permitting processes for production sites and reduced administrative formalities.
Financial and Protective Instruments
The Important Projects of Common European Interest (IPCEI) are a key tool for financing this renewed industrial policy. By the end of 2023, the EU had authorized seven member states, including France, to mobilize over one billion euros in subsidies to support industrial operations.
The Carbon Border Adjustment Mechanism (CBAM), which will come into force on January 1, 2026, will impose a carbon tax on certain imported products equivalent to that applied to European manufacturers. The Net-Zero Industry Act also requires that 30% of tender evaluation criteria for renewable energy projects consider factors other than price.
Towards a European Industrial Renaissance
Europe has the means to succeed in its industrial transformation, provided it leverages key territories and overcomes existing obstacles.
Territorial Opportunities
Certain regions are proving particularly attractive for industrial reshoring in France. For example, Auvergne-Rhône-Alpes accounts for 48.5% of reshoring projects identified in a February 2023 survey of industry representatives by the network of Chambers of Commerce and Industry (CCI). This attractiveness is due to the strong presence of R&D and training centers, affordable industrial land availability, its strategic geographical location, and a dense industrial network.
Priority Products for Reshoring
The same survey also identified products considered highly suitable for reshoring, including construction materials like cement, pharmaceutical active ingredients, and paraffin for candles. Semiconductors and electronic components are also a priority, as are energy equipment such as solar panels, heat pumps, and compressors.
Industrial reshoring primarily involves production returning to France from other European countries. This geographical proximity facilitates repatriation projects and reduces transition costs.
Recommended Action Levers
For companies, internal training is a key lever for developing skills with public support. Technological innovation, particularly automation, helps offset production cost gaps. Strengthening local ecosystems and partnerships also supports successful industrial reshoring initiatives.
On the public side, administrative simplification and faster permitting processes are key priorities. Access to industrial land should be improved, particularly by making suitable plots available. Ensuring affordable energy supplies is also essential for industrial competitiveness. Finally, public aid should come with stricter conditions to ensure localization commitments are met.