As geopolitical shocks, tariff disputes, inflationary pressure and transport bottlenecks continue to unsettle global trade, companies are moving away from tightly optimised sourcing models and towards more resilient, multi-country networks. The emphasis is shifting from the lowest cost to greater flexibility, with businesses trying to build supply chains that can withstand sudden disruptions.
India is emerging as one of the main beneficiaries of that reset. The country is incre...
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asingly being viewed as a dependable manufacturing base and a key node for speciality chemicals, electronics, engineering goods and agri-chemicals. That reflects a broader trend away from heavy dependence on single suppliers, especially in China, and towards what companies see as a safer China-plus-one strategy.
According to industry analysis, the rise of onshoring, nearshoring and friendshoring is changing how firms organise production and procurement. Rather than relying on one long, fragile chain, companies are spreading risk across regions and trusted partners. That can add complexity, but it also reduces vulnerability to trade barriers, conflict-related disruptions and shipping delays.
In the agrochemical sector, this diversification is already visible. Large firms are increasing purchases of raw materials and intermediate inputs from more stable markets such as Japan, while also looking to the United States and Europe for alternative supplies. The shift is being driven in part by the concentration of technical materials in China and by fears of shortages if tensions in the Gulf worsen.
The vulnerability of those routes is significant. The Strait of Hormuz carries a meaningful share of chemical cargoes, including fertilisers, as well as dry bulk shipments such as grains. With India the world’s biggest importer of urea and diammonium phosphate, sourcing decisions have become more strategic, and the country is said to be broadening supply options to include Belarus, Russia, Indonesia and China.
Food and farm commodity flows are also being redrawn by conflict. Disruption to Black Sea exports has pushed importers to seek alternatives, and Egypt, which once relied heavily on Ukraine for wheat, has begun buying from India and Argentina. S&P Global has also warned that conflict in the Middle East is affecting energy, transport, food and manufacturing networks more broadly, with interruptions in regional exports amounting to a notable share of global GDP.
Digital tools are becoming a parallel priority. Companies are increasingly investing in AI-enabled supply chain systems that can flag congestion earlier, track inventories in real time and improve end-to-end visibility. At the same time, more firms are trying to localise production closer to demand centres, reducing exposure to trans-continental logistics risks and border frictions.
India’s growing importance is not confined to chemicals and agriculture. The country is also becoming a more prominent electronics manufacturing base. It now produces more than 300 million smartphones a year, making it the world’s second-largest mobile phone manufacturer, while electronics exports crossed $29 billion in 2024, helped by handset output and wider semiconductor investment.
That momentum is reinforced by India’s position in the semiconductor value chain. Research from the Centre for Strategic and International Studies says India already has strengths in chip design, a deep STEM talent pool and growing international partnerships aimed at expanding fabrication, advanced packaging and precompetitive research. With semiconductor supply chains still highly concentrated, India is being positioned as part of the diversification answer rather than a standalone replacement.
India has also been active in supply-chain diplomacy. One early step was the Supply Chain Resilience Initiative, launched with Japan and Australia in 2021 to encourage firms to spread manufacturing across more locations and reduce dependence on any single country. More recently, reports have suggested India has been drawn into broader US-led technology supply-chain efforts that run from rare-earths to chipmaking tools, underlining its rising strategic value.
The broader logic is clear: in an era of geopolitical friction, supply-chain resilience has become as important as cost efficiency. For India, that creates an opening to deepen its role as a trusted production hub, not just for domestic needs but within the wider architecture of global trade.
Source: Noah Wire Services
