Decoding the Supply chain Conundrum for Making India the Global Manufacturing hub
The Global supply chain's over-reliance on China's manufacturing industry and its latent inherent weakness have been exposed by the supply chain disruptions jolted by the spread of catastrophic Covid-19. Several hitherto torpid economies and organizations across the globe are now realizing the pressing need to diversify their manufacturing hubs. As economies working relentlessly to cope with the crisis, now they are looking for an alternative location for manufacturing and thus to curtail their dependency on only a handful of countries. "India needs to gear up and seize this opportunity to attract those companies whose top priority is to relocate; this will support the supply chain. This will generate employment opportunities in India and help its augment per capita income", said Kanwarjeet Singh Wadhwa, a pioneer in this field and the Chairman and Managing Director of Grace Group, industry’s renowned logistic services and supply chain provider, which has been providing exemplary service in the field of Global International logistics, Supply chain, travel and export connected manufacturer since 1987. He further adds, " the responsibility of concerning enterprises to provide seamless and cost-efficient logistic services and supply-chain management has increased manifolds as the pandemic has made a big dent on the global supply chain".
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Hand-picking an apt location for setting up or expanding a business is complex and requires great deliberations. Factors such as land reforms, production-linked incentives, tax regime, geopolitical factors, availability of skilled human resources, physical infrastructure and digital connectivity, the strength of supply chain logistics and so on, dramatically influence the decision. India with its young, upskilled and affordable workforce along with a supporting industrial system represents a conducive environment for overseas investors with access to its vast demographically charged and active market. Multinational corporations from several countries have already manifested their interest in shifting their manufacturing destination to India. Manufacturing encouraging initiatives such as production linked incentive scheme, reduction in corporate tax, Aatmanirbhar Bharat program, easing land acquisition and labour laws has further intensified the interest of global manufacturing players in India.
According to a recently released report by World Economic Forum entitled "Shifting Global Value Chains: The India Opportunity", India has the potential to reshape supply chains and become a global manufacturing hub. It is estimated and targeted that India could contribute more than 5-tillion dollars in annual economic impact to the global economy by 2025 and thus can play a significant role in reshaping the global supply chains. The report has also outlined five possible ways for India to realize its manufacturing potential, these comprise coordinated action between the government and the private sector, shifting focus from cost advantage to building capabilities, accelerating integration in global value chains by reducing trade barriers (tariff, quota, etc) and enabling competitive global market access for Indian manufacturers, lower cost of compliance and focusing infrastructure development on cost-saving, speed and flexibility.
Apart from these advantages, some existing bottlenecks such as poor infrastructure, lack of reliable electricity, regulatory hurdles, problems in enforcing the contracts, logistical delays etc are preventing India from reshaping the Global supply chains. For becoming a trusted supply chain partner and a world-leading manufacturing hub, India first needs to deal with these issues. The most problematic of these are logistical delays and it demands immediate attention. Owing to poor infrastructure and connectivity, logistical delays immensely increase the cost of production which in turn disincentivizes the Global manufacturers to set up their manufacturing units in India and thus impeding India in the path of becoming self-reliant. Karanjit Singh Wadhwa, Director of Grace Group whose suite of services has also contributed to accelerating trade that drives the economy by providing a seamless delivery of commodities, said "Logistics and Supply chain management involve a combination of Multi-modal stakeholders carving a customised solution for all customers keeping in view cost, transit, Customs requirements and time sensitivity. Manufacturing is an important bases for the country’s economy and growth which is unattainable without the right blend of Supply Chain management. The pandemic is playing a vital role in shining the spotlight on India as a potential manufacturing hub and to harness this opportunity several efforts have been made by the central and state governments by putting Air-Charters contactless and online approval of inflow and outflow of commodities have further strengthen India's position vis-a-vis other competing countries. With Covid-19 changing the dynamics, we had an opportunity to think beyond the regular standard procedures and inculcating new innovative ideas, system and routes which has helped in vertical growth".
In this era of cut-throat competition among economies to become a global manufacturing hub as many economies lure overseas investors with low import duties and fast supply of commodities, it has become of utmost importance for India to cut down the logistical costs of both imports and exports and supply of commodities on time. Grace is affiliated with Top Airlines, Integrators and many mega carriers as their extended arm and has been operating many international to International, International to domestic and within India managing the supply chain focused on Air-Cargo.
Karanjit Singh Wadhwa, Director of Grace Group, states “Managing the supply chain logistics is complex but we are glad that with our team of dedicated and efficient professionals, we have been meeting the expectations of our customers and we still strive to improve our services and that is our main motive". Strengthening the supply chain and logistics by increasing investment in research and development and better management will augment India's share in global trade and help her achieve sustained long-term revenue growth. India, with its young and skilled workforce and enterprises like Grace Group, could be a pioneer in logical destination for setting up manufacturing units and thus soon India becomes a global manufacturing hub with integrated 360° logistic partner defining futures logistic market in India.
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