How India plans to 'bring stability to global supply chains' on its own terms

11 January 2023

India’s prime minister Narendra Modi has claimed the world is looking to India to bring stability to the global economy as it seeks to capitalise on supply chain disruptions in neighbouring China.

But Modi warned that India could only take full advantage of this if provincial states take the lead, maintaining a focus on quality and taking decisions with an “India-first” approach.

In a speech to state civil service leaders Modi urged them to focus on better governance, ease of doing business, and improving infrastructure.

He also underlined the need for India to move towards self-certification and standardisation of forms.

Over the past month, Indian government departments have been stressing the need for public contracts to remove “restrictive and discriminatory” conditions that could prevent local suppliers from participating in tender processes.

The railways ministry ordered procuring agencies across the rail network to avoid such conditions.

And in December, the Department for Promotion of Industry and Internal Trade (DPIIT), part of the Ministry of Commerce and Industry, highlighted some of these conditions – which it said contravened procurement regulations.

The DPIIT said it had identified 12 conditions that suited the interests of foreign manufacturers more than Indian suppliers.

These included specifying the requirement for products to comply with foreign technical standards rather than Indian certification.

The department also criticised contracts whose pre-qualifying criteria included an “excessive” turnover requirement – as this could also potentially exclude Indian suppliers.

Modi called on state governments to review their training, infrastructure and building programmes.

His remarks come as Bloomberg reported that Apple exported more than $2.5bn worth of iPhone handsets from India between April and December 2022, nearly double the total for the entire previous financial year.

Apple iPhones are produced in two locations in India: Sriperumbudur and Hosur, both in the southern state of Tamil Nadu.

The Times of India quoted Counterpoint Research analysts Ivan Lam and Shenghao Bai as saying: “Led by Foxconn and Pegatron, companies have already invested in factories, production lines, relatively advanced manufacturing processes, and personnel training in India.”

In September SM reported that Apple had begun to shift some of its manufacturing away from China to India and Vietnam.

A client report from JP Morgan said the tech giant planned to shift 5% of global iPhone 14 production to India by late 2022 and was expecting to produce 25% of all iPhones in India by 2025.

And more than 67% of respondents to a survey by German logistics platform Container xChange believe India and Vietnam will “rise as a functioning container shipping hubs” this year.

The platform surveyed more than 2,600 industry professionals from over 20 countries on shipping and supply chain industry trends for 2023.

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