India's supply chain resilience takes centre stage amid global disruptions and technological shift

As India faces ongoing supply chain disruptions, experts advocate for hyper-collaboration and digital integration to bolster resilience, alongside strategic policy shifts to reduce import dependence and strengthen local industries.

Since the onset of the COVID-19 pandemic, Indian supply chains have faced relentless disruption, a challenge that continues into 2025 amid shifting global trade dynamics and the nation’s continued dependence on imported critical materials. ...

Business leaders remain on edge as industries grapple with supply chain vulnerabilities, particularly in sectors like pharmaceuticals, electronics, aerospace, and automotive manufacturing.

A recent analysis by Igor Rikalo, Chief Operating Officer of enterprise AI platform provider o9 Solutions, highlights the urgent need for what he terms “hyper-collaboration” to build supply chain resilience. Traditional data-sharing and planning methods, he argues, are too slow and fragmented to keep pace with today’s rapidly changing market conditions. Instead, companies need integrated digital platforms that enable end-to-end visibility and real-time data exchange across internal teams and external partners. This approach allows logistics, procurement, and customer service functions to align swiftly, respond to disruptions proactively, and maintain operational continuity.

Hyper-collaboration, as Rikalo elaborates, is particularly critical within the zero-to-three-month planning horizon. Real-time dashboards and control tower solutions can help planners identify bottlenecks, automate allocation rules, and coordinate resource movement to prevent stock-outs and delivery delays. This kind of synchronized decision-making is invaluable when sudden disruptions, such as port delays or demand spikes in metropolitan areas, threaten to ripple through the supply chain.

Beyond the immediate operational benefits, building resilience requires collaboration across the entire ecosystem, connecting suppliers, manufacturers, and downstream partners. Shared visibility of demand patterns, production capacities, inventory levels, and logistics status creates collective intelligence that strengthens planning and execution at short, medium, and long-term levels.

This perspective aligns closely with broader trends and government initiatives in India aimed at mitigating supply chain fragilities. India’s heavy import dependence on key materials from countries like China continues to pose significant risks. For instance, India imported over 53,000 metric tons of rare earth magnets in the fiscal year ending March 2025—critical components in high-tech fields such as automotive manufacturing, wind energy, and medical devices. Although India holds the world’s fifth-largest reserves of rare earth elements, its domestic production capabilities remain nascent. In response, the government has launched a seven-year national programme to promote domestic rare earth supplies, offering incentives for companies to invest in processing and magnet manufacturing facilities to reduce import reliance and bolster supply chain security.

Similarly, the aerospace sector in India reflects a shift toward strengthening local supply chains amid global disruptions. Major aerospace firms such as Airbus, Collins Aerospace, Pratt & Whitney, and Rolls-Royce are increasingly sourcing parts from Indian suppliers. Indian companies like Hical Technologies and JJG Aero are benefiting from rising demand, contributing to the Asia-Pacific aerospace industry’s projected 54% revenue growth above 2019 levels in 2024. India’s ambition to capture a 10% share of the global aerospace supply chain market in the next decade underscores the strategic move from low-end manufacturing toward higher value-added activities including design and engineering, supported by better coordination and utilisation of indigenous raw materials.

However, the journey toward supply chain resilience faces persistent infrastructure challenges. Indian manufacturing, which accounts for nearly 17% of GDP, contends with inadequate rail and road connectivity between industrial hubs and ports, hampering efficient logistics. The automotive sector, a key industry, suffered a 20% production decline in 2023 due to global semiconductor shortages. India’s limited semiconductor manufacturing capacity compels dependence on imports from Taiwan, South Korea, and China, exacerbating vulnerability to supply shocks and geopolitical tensions.

Beyond these operational and infrastructural hurdles, research reveals deeper structural issues in supply chain resilience. A working paper from the National Bureau of Economic Research shows Indian firms faced significant disruption when their suppliers were located in districts under strict lockdowns during the pandemic. Those purchasing complex products with fewer alternative suppliers experienced greater shocks. Post-pandemic, many firms adjusted supplier relationships to form new connections with larger, better-connected suppliers, indicating a strategic shift towards more resilient supplier networks.

The pharmaceutical sector also illustrates India’s supply chain fragility, heavily reliant on imports from China. This over-reliance has prompted government policies investing ₹3,000 crore in Bulk Drug Parks to promote domestic manufacturing of critical raw materials and intermediates within the next five years. These moves aim to reduce dependency on imports and build self-sufficiency, echoing the broader national goal of enhancing supply chain resilience through diversification and localisation.

Furthermore, empirical studies on the Indian automotive sector show a tangible impact of supply chain disruptions on company performance and investor confidence. Understanding these linkages can help companies and investors better prepare for and mitigate the risks inherent in globalized and interdependent supply chains.

In sum, Indian supply chains in 2025 face a complex landscape of persistent vulnerabilities intertwined with emerging opportunities for transformation. Building resilience is no longer just about weathering the storms of today but preparing proactively for future disruptions through hyper-collaboration enabled by digital technologies, strategic government initiatives to reduce import reliance, industry shifts toward localising supply chains, and infrastructural improvements. This multifaceted approach is essential for India to maintain competitiveness, ensure business continuity, and navigate an increasingly volatile global trade environment with confidence.

Source: Noah Wire Services