The disruption in global supply chains in the wake of the Covid-19 pandemic has created a challenging situation for countries across the globe. Many nations have witnessed severe shortages of goods and commodity prices have shot up. This has adversely impacted countries across the world as well as India.

While the situation sounds grim, it offers India with a lifetime opportunity to strengthen its manufacturing prowess and position itself as a critical hub in global value chains.

In fact, in May 2020, when the country was in the throes of the pandemic, Prime Minister Narendra Modi, in his address to the nation, shared his vision of an ‘Atmanirbhar Bharat’ or self-reliant India to strengthen the country’s social and economic pillars. He defined the economy, infrastructure, system, demography, and demand as the five pillars to build the “new normal.”

Slew of reforms

In terms of investment, the Government undertook a slew of reforms which has made India a much more easier place to do business. Easing of FDI norms and opening up of sectors such as defence and manufacturing, agricultural reforms, and progressive labour laws, along with initiatives in the infrastructure sector such as the launch of the National Infrastructural Pipeline (NIP), will greatly boost Indian engagement with overseas companies.

Due to the gradual liberalisation of its FDI policy, and robust domestic economic performance, India has attracted higher FDI flows. For the corporate sector, this is a crucial time when they must develop strategies to re-engineer themselves and become an integral part of global supply chains.

As the economy revives, business leaders in India need to make quick decisions to sustain business operations to serve the interest of their customers, clients and employees. Hence, to manage the impact of Covid-19 on India’s supply chains, resilience and responsibility are needed by corporates to tackle financial and operational challenges.

Among other things, companies must use this challenging period to discover where investments are needed. For instance, in supply chain procurement, areas for immediate attention would be to develop a revitalised digitally powered procurement operating model and new systems of functioning with the entire supplier ecosystem.

Also, there is a need to minimise wastage in terms of expenditure and be able to save cash for future growth measures. Investments must be made to bolster infrastructure for supply chains to enable a strong supply chain management system, which would be in sync with the current global scenario.

Companies need to adopt cognitive planning, AI-driven predictive analytics, advanced track and trace, and blockchain technologies to be an effective part of global supply chains.

Notably, it is significant to check and validate Business Continuity Planning (BCP). Covid-19 was an unprecedented event. In the pre-coronavirus pandemic era, businesses were not designed for such disruptions. Corporates must understand that inadequately planned or costly BCPs will fail to support any business. Hence, they need to calculate to safeguard cost, customer service, financial impacts, and risk factors.

During the pandemic, customers’ buying behaviour changed as online buying became popular. The traditional demand patterns of the past are now old fashioned. Customer expectations have changed as they think anything ordered online can be returned. Therefore, businesses need to plan to significantly enhance the return on investment of any future financing in supply chain infrastructure.

Significantly, Indian businesses need to plan investments for new technologies and additional logistics commitments, offering them as variable cost solutions for flexibility and cost control. Consequently, building a more diversified and robust supply chain with greater potential for risk and cost mitigation in the future.

As can be observed, the time is ripe for Indian Industries to augment investment in critical sectors such as electronics and find ways to tap into the global value chains.

The writer is Secretary General, ASSOCHAM