Self-reliance and supply chains

India needs to focus on manufacturing competitiveness, rather than building domestic supply chains in their entirety

As India redefines national priorities in the face of the Covid pandemic, it has, in the economic context, sought to invoke the objective of self-reliance. The aim is to evolve local supply chains, reduce import dependence and instead emphasise import substitution while simultaneously seeking export competitiveness. These goals may prove elusive. Let us understand why. 

Building a competitive industrial base through import substitution is a long process, possibly spanning decades, as it requires specialisation and scale in all components of the supply chain. Characterised by proximate production and development of necessary sectoral competencies, such “lumpy” industrialisation was predominant prior to