Shift in regional supply chains (nearshoring)

As global supply chains face increasing disruptions, Indian businesses are adopting nearby sourcing strategies. Near sourcing involves production or the transfer of sourcing activities to nearby countries, often within the same region. The goal of this approach is to reduce costs, mitigate risks, and enhance supply chain flexibility.

Major Benefits of Near Sourcing for Indian Businesses:

1. Lower Costs – Near sourcing helps Indian businesses reduce transportation, tariff, and inventory management costs. By sourcing components or products from nearby countries, companies benefit from shorter lead times and lower shipping expenses.
2. Enhanced Supply Chain Flexibility – Near sourcing reduces the risks associated with global disruptions, such as trade wars, natural disasters, or political instability. By diversifying their supply chains with suppliers from nearby regions, Indian businesses can reduce their dependence on distant suppliers and improve overall flexibility.
3. Better Quality Control – Sourcing from nearby suppliers allows companies to maintain better control over quality and standards. By working closely with regional suppliers, Indian companies can ensure products meet their specifications, reducing the risk of defects.
4. Increased Market Access – Near sourcing helps Indian businesses expand into new markets. Establishing relationships with suppliers and customers in neighboring countries allows companies to grow their customer base and increase market share.

Adoption of Near Sourcing by Indian Companies:

Many Indian companies across various industries are adopting near sourcing strategies. For example, in the automotive sector, Indian manufacturers are increasingly sourcing components from neighboring countries like Bangladesh and Vietnam to reduce costs and improve supply chain efficiency. In the coming years, this approach is likely to play a crucial role in shaping India's manufacturing and trade landscape, driving sustainable growth and competitiveness on a global scale.