Global value chain/global production network studies have extensively documented the role of lead firms from the Global North in economic development in the Global South, including as ‘manufacturers without factories’ (MWFs). However, the role of local firms in sourcing from suppliers has been overlooked. In this article, we report the findings of a qualitative study and demonstrate that the local MWFs helped establish India as the leading supplier of pharmaceuticals worldwide and in the Global South. We show how the different types of local MWFs (‘propagandists’, ‘pioneers’, ‘connectors’ and ‘adaptors’) impact the strategic coupling, industrial upgrading and governance in South–South value chains and contribute to regional economic development.