How positioned is India to become a major Global Supply Chain Power?
The global supply chain landscape is undergoing a monumental restructuring, shifting away from concentrated single-country models towards resilience, diversification, and the ‘China+1’ strategy. Positioned strategically with a vast demographic dividend, an expanding market, and renewed political will, India stands poised to dramatically increase its share in global supply chains (GSCs) over the next decade. Success in achieving this vision, however, will hinge on its ability to rapidly resolve persistent domestic logistical and infrastructural bottlenecks while capitalizing on key sectoral successes.
India’s ambition is fundamentally driven by the government’s Production-Linked Incentive (PLI) schemes and its associated ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives. The PLI program has become a powerful magnet for foreign direct investment (FDI), successfully driving a transformation in sectors previously reliant on imports. The electronics manufacturing sector serves as a flagship success, transitioning the nation from a net importer of mobile phones to a major net exporter.
Global giants like Apple’s contract manufacturers have established robust export capabilities, helping to generate significant production value and employment.
Similarly, the pharmaceutical sector has leveraged the PLI scheme to achieve a net export surplus in bulk drugs, critically reducing dependency on foreign suppliers for raw materials. This strategic policy push is concurrently attracting major multinational corporations, evidenced by Japanese auto giants like Toyota and Honda actively pivoting manufacturing and export capabilities away from China and toward India.
Over the next decade, projections place India’s manufacturing market size to reach a remarkable $2.24 trillion by 2035, with the industrial sector potentially claiming 30 to 32 percent of the national GDP. Key sectors are expected to contribute disproportionately to GSC integration. The electronics ecosystem is targeting a $500 billion valuation by 2030–31, while the auto component industry expects its share in global trade to more than double, growing from approximately three percent to eight percent by 2030. These targets indicate a shift from low-value assembly towards high-value, tech-intensive manufacturing that is deeply embedded in international networks.
Despite these significant strides, India’s journey to becoming an indispensable global manufacturing hub faces substantial hurdles. The most immediate challenge lies in addressing the high cost of logistics, which currently sits between 13 and 15 percent of GDP—far higher than the global average. This inefficiency is a direct result of infrastructure gaps, including poor road quality, congested ports, fragmented service providers, and complex regulatory compliance across state lines. While initiatives like the National Logistics Policy (NLP) and PM Gati Shakti aim to reduce this cost to below 10 percent through multimodal connectivity and digital integration, their effective and timely execution is paramount. Furthermore, cultivating a skilled workforce capable of handling advanced manufacturing processes, data analytics, and automation remains critical to transitioning from a labor-cost advantage to a technology-led competence.
In conclusion, the decade ahead offers India a once-in-a-generation opportunity to cement its position in the rearranged global economic order. The policy frameworks are in place, geopolitical tailwinds are favorable, and major industries are responding positively. If New Delhi can accelerate its planned infrastructure modernization and streamline regulatory processes to bring logistics costs in line with global competitors, India will not just be a secondary hedge against concentration risk, but an indispensable and resilient nexus of the future global supply chain.
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