Niti plan in works to lower reliance of India's supply chains on China
supply chains on China. The Niti Aayog has been tasked with drawing up the strategy, which will focus on bridging the country's trade deficit with its neighbour over time and suggest measures to secure supply chains from risks stemming from geopolitical developments.
Near-shoring, friend-shoring and localisation have gained traction globally post-Covid, with many countries looking to de-risk supply chains and reduce sourcing ties with China.
The Aayog will firm up its action plan recommending policy interventions needed in the form of tariff and non-tariff barriers as well as changes to the regulatory framework, said a senior government official with knowledge of the matter.
Focused Intervention
As part of the exercise, the Niti Aayog will rope in a consultancy firm to review India-China trade, with its report expected in six months.
The official said the need for focused intervention had arisen due to the centrality of China to India's supply chains in certain sectors. «Dependency and vulnerability of the Indian supply chains and production networks was highlighted during crisis situations such as the Covid-19 and geopolitical conflicts,» the official said, adding that there was need for supply diversification.
Export Edge
The trade study will aim to discern patterns of India's trade dependency on China and the underlying reasons for this. It will compare supply chains related to the country's trade with other Asian countries with the aim of de-risking them.
