Shaktikanta Das warned Indian industry to diversify supply chains and build buffers to mitigate economic risks from rising global geopolitical tensions [1, 2].
This call for strategic reorientation comes as global instability threatens the reliability of single-source suppliers, potentially disrupting the growth trajectory of Indian businesses.
Speaking at the Confederation of Indian Industry (CII) Annual Business Summit in New Delhi, Das, who serves as Principal Secretary to Prime Minister Narendra Modi and is a former RBI Governor, addressed the vulnerability of current industrial models [1, 2]. He said that the traditional reliance on the most cost-effective or singular sources is no longer sustainable in the current climate.
"The world of corner solutions is increasingly becoming less efficient," Das said [1].
To combat these risks, Das outlined seven specific strategies for Indian firms to enhance their resilience [2]. These measures include reducing dependence on single-source suppliers, and investing boldly in infrastructure and capacity to navigate global volatility [2, 4].
Das said that the shift toward diversification is not merely a tactical change but a necessity for survival in an uncertain global market. "Strategic reorientation towards diversified supply chains is essential for long-term resilience," Das said [3].
He further said companies should maintain higher buffers to absorb sudden shocks in the supply chain, ensuring that production does not halt during geopolitical crises [2]. This approach aims to shield the domestic economy from external shocks while maintaining a competitive edge in international trade.
While the focus of the summit was on long-term resilience, the broader economic context remains a priority. The RBI previously pegged the GDP growth projection for FY'25 at 7% [8], driven by improved consumption demand and private capital expenditure.
“The world of corner solutions is increasingly becoming less efficient.”
The shift from 'just-in-time' efficiency to 'just-in-case' resilience marks a fundamental change in India's industrial strategy. By prioritizing supply chain diversification over the lowest possible cost, Indian firms are attempting to insulate themselves from the volatility of geopolitical conflicts and trade wars, signaling a move toward strategic autonomy in manufacturing and sourcing.
