Things to know about India’s role in global supply chains

Global supply chain dynamics are undergoing a major transformation. This change offers a unique opportunity for India to become a leading supply chain hub.

global supply chain system

The global supply chain was heavily dependent on China’s manufacturing industry. This fact came to light during the spread of the catastrophic COVID-19. While China is still critical to global supply chains, the world’s perception is changing. Companies are focusing more on countries like India.

This shift has helped India become a leading supply chain and manufacturing hub. The rapid adoption of e-commerce has also contributed to India’s emergence. Here are some facts and opportunities about the changing supply chain configuration that you should know.

Fact: India has a relatively less well-established manufacturing sector. Its supply chain market is well-integrated

India has a diversified corporate landscape and skilled and inexpensive labour. These factors make it a promising part of the global supply chain market. Moreover, the country enjoys access to vast resources and strong macroeconomic fundamentals. But some roadblocks do not allow it to become a leader in the global supply chain ecosystem. The manufacturing sector is less well-established. The infrastructure is also underdeveloped.

Also Read: Can GIFT City Put India In The League Of The Global Financial Hubs Such As Singapore And Shanghai?

Fact: The government takes proactive measures to put India on the global supply chain map

The government has introduced earnest policy reforms in the infrastructure and logistics sector. It is also focusing on ramping up manufacturing in the country. An incentive program was approved in March 2020. It was known as the Production Linked Incentive Scheme and was designed for large-scale electronics manufacturing. It focused on creating economies of scale and ensuring efficiencies. It also provided a conducive manufacturing ecosystem. These efforts put India on the global supply chain map.

Opportunity: The manufacturing sector will benefit significantly from this transition

Many recent developments show the growing confidence of companies in India as a manufacturing hub. Market leaders like Apple Inc., Amazon, and more have set up manufacturing units in the country.

Opportunity: New-age technologies to promote logistics opportunities

In the upcoming years, there will be greater use of new-age technologies. Drones and other similar technologies are already playing a crucial role in logistics. Machine Learning (ML) and other innovations are key for optimising core logistics operations.

Also Read: Initiatives By The Indian Government To Boost Startups In India

Impact of India’s participation in the global supply chain industry

In the past, European and American companies invested heavily in China. Factors like low production and the growing domestic consumer market were attractive to them. But this is changing. India is on its way to becoming a prominent player in the international supply chain. It appears to be an attractive investment location for investors worldwide and offers a positive demographic dividend and strong macroeconomic fundamentals.




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