India’s manufacturing PMI in May hit a 31-month high while China’s manufacturing PMI fell to a five-month low.

It is not just the domestic demand that is pushing India’s manufacturing PMI up, but a strong push from international partnerships.

A recent Global Operations Benchmarking survey revealed that 87.9 per cent of the CEOs surveyed are looking at India as their primary alternative to China.

The current geopolitical situation has created a unique opportunity for India to emerge as a major player in the global supply chain and leverage the ‘China plus one’ strategy.

Despite the challenges posed by the pandemic, India has shown resilience and has emerged as a preferred destination for global companies looking to diversify their supply chains.

With India reaching its best-ever rank at 38 in the World Bank’s Logistics Performance Index, it is poised to e a big player in the global supply chain. There are a few factors that contribute its current position and future growth:

Government initiatives

Production Linked Incentive (PLI) schemes were introduced in sectors such as automobile, electronics, medical devices etc. to not only incentivise multinational enterprises to set up production in India but also incentivise domestic manufacturers to expand their manufacturing output and global exports.

Other important initiatives including the PM Gati Shakti Plan, the National Logistics Policy, etc. aim to create world-class infrastructure and improve capabilities to lower the cost of logistics from the current value of 13-14 per cent of GDP to less than 8 per cent.

To be a role model in managing complex supply chains, a country must create an ecosystem that fosters collaboration, innovation, and entrepreneurship and encourages the growth and development of all stakeholders. Especially, MSMEs need to be empowered to supply products and services available at the last-mile to the diverse population of the country.

Unified Payments Interface (UPI) has nudged even the street hawkers to adopt digital payments. Open Network for Digital Commerce (ONDC) is another initiative to bring more e-commerce power to small-scale firms providing various goods and services.

Supply chain start-ups

To solve some of the intricate supply chain problems, several supply chain start-ups have mushroomed. While there are many e-commerce start-ups that cater to consumer needs, some supply chain start-ups such as Moglix and Udaan are helping solve some of the upstream supply chain problems.

Agricultural supply chain start-ups such as DeHaat and Ninjacart are using tech-based solutions to solve the ‘farm-to-fork’ problems by eliminating the middlemen and providing fair and just payment to farmers. Logistics start-ups such as Rivigo and BlackBuck are making logistics more humane using the relay logistics model.

Robotics start-ups such as GreyOrange and Unbox Robotics are providing enterprise solutions with AI and cloud-enabled warehouse automation robots.

Although the policy push to make India a manufacturing hub with efficient logistics is undoubtedly important, it is equally crucial that we focus on leveraging our inherent strengths to offer tailored solutions to the challenges that the global supply chain industry faces.

India has a track record of delivering innovative solutions which have proven to be successful even at a large scale. By building on our strengths and expertise, we can continue to offer bespoke technical solutions that meet the unique demands of the ever-evolving global supply chain industry.

This will not only help India fortify its position as a key player in the supply chain industry but also pave the way for sustainable growth and development.

The writer is Faculty - Operations Management and Decision Sciences Area, Indian Institute of Management Tiruchirappalli

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