By Lalit Das
Logistics for MSMEs: Following Covid-19 and the ensuing economic turbulence, including manufacturing disruptions, declining demand, and more, businesses and governments worldwide have been forced to acknowledge the challenges and shortcomings of supply chain ecosystems and rethink their strategies. India has formally taken over the G20 presidency on December 1, 2022. It aims to focus the policy agenda on a complicated subject related to creating secure and robust global supply chains to aid nations in recovering more quickly in the post-pandemic era.
India’s G20 Vision
More than 200 G20 meetings will be hosted by India over the following 12 months, with the country also collaborating with the other G20 countries to bridge the digital divide. According to a statement from India’s Ministry of External Affairs, Prime Minister Narendra Modi said, “Global supply chains are in ruins. There is a crisis of essentials and essential goods worldwide, and the global challenge for underprivileged citizens is more severe.” Therefore, India plans to develop a strong and resilient supply-chain strategy for the post-Covid era through global collaborations and diplomatic efforts that consider the interests of all parties involved.
Also read: 5 logistical strategies for MSME exporters to win big amid supply chain crisis
India’s supply chain sector
According to the information published on November 15 by India’s commerce ministry, the nation’s total exports from April to October were estimated to be $444.74 billion, up 19.56 per cent over the same period last year. This demonstrates the Indian supply chain and logistics industry’s immense potential, its burgeoning SME sector, and its capacity to overcome obstacles and devise solutions for large-scale disruptions.
Key focus areas
But to maintain its strategy’s long-term viability, India must ensure its plans align with the goals of all other member states. This can be accomplished by basing its policy framework around the following key aspects:
- Creating reliable and durable supply chains in collaboration with private entities.
- Fostering regional and international cooperation at the G20 by employing diplomatic cooperation and engagement initiatives.
- Paying special attention to strategies to “build back digital” and “build back green.”
Collaborative strategy empowering SMEs
States and enterprises must collaborate closely to assess the elements contributing to a successful supply chain, pinpoint critical failure areas, guarantee consistent and targeted investment, and create rules that promote business certainty. To build resilience, supply chains must be strong enough to cope with future developments and changes and nimble enough to adjust to disruptive conditions as they materialize. This would necessitate international efforts to digitize supply chains and implement interoperable standards that help guarantee efficient interaction and communication between supply chains worldwide. These initiatives must be prioritized on India’s agenda to create a holistic path forward, focusing on small and medium-sized businesses that make up a majority of the country’s manufacturing and services industry.
Also read: How small businesses can outgrow the global supply chain phenomenon
Ensuring security and democratizing supply chains
Since safety and security are critical factors for such enterprises’ supply chains, India’s policy has a significant opportunity to look at several potential solutions. Maintaining security at every stage of the supply chain must entail utilizing modern organizations like the Indo-Pacific Economic Framework (IPEF) or the Supply Chain Resilience Initiative (SCRI) made up of Australia, Japan, and India in supply chain diversification and cybersecurity requirements across trusted channels. By localizing the efforts made to meet the SDG targets and democratizing the value chains, small and medium businesses can benefit greatly from a smoother supply chain network spread across both remote and urban nodes.
Potential of Indian agriculture
Agriculture can also significantly assist the diplomatic community. As a democracy, an India-led global value chain can help connect Indian agriculture with the entire world, leading to a plethora of opportunities for farmers and smaller businesses. This can help increase export opportunities while addressing global food shortages simultaneously, survival and sustenance disparities, and enabling nutritional security.
Empowering regional producers and traders
Businesses today prioritize regional cluster-based supply networks like IPEF above bilateral supply chains due to recent supply chain disruptions. These regional clusters help lessen dependency on a single state and even boost resilience, working with smaller groups of suppliers and traders. In light of the surge in economic protectionism in reaction to the epidemic, India can play a crucial role in developing the necessary capability for supply chain diplomacy initiatives inside and outside the government.
Leading by example
The goal of India’s agenda must be to develop a set of supply chain management and design standards that all G-20 countries can accept. To ensure a global economic order built on fair and transparent principles, which also allows countries to be self-sufficient, it must ensure that larger economies like India and the United States lead the way in making crucial commitments to the principles of open and free trade.
India may utilize its presidency to promote a culture of cooperation and become a facilitator of energy diplomacy, as seen with the International Solar Alliance (ISA). This will result in the exchange of knowledge and resources across governments and enable different jurisdictions to create supply chains that are energy-efficient, robust, and adaptive. This will also cater to the socio-economic variations and disparities of nations and demographics and empower small and independent businesses to compete with larger corporations.
Lalit Das is the Co-founder and CEO of 3SC Analytics. Views expressed are the author’s own.