How to secure India’s supply chains, Pg7

Key Highlights:

• India imports 85% of its crude oil and over 50% of its gas, making it vulnerable to geopolitical shocks.
• A $10 per barrel hike in crude prices can increase India's import bill by $13-$14 billion and raise consumer inflation by 30-40 bps.
• India's domestic output of oilseeds meets only 44% of demand, necessitating imports.
• India imports nearly 65-70% of its pharmaceutical intermediates from China.

Detailed Insights:

• Energy security requires diversification of energy sources, expansion of domestic capacity, and technological transition towards renewable energy.
• National Green Hydrogen Mission aims to decarbonize industries reliant on imported oil and gas.
• Strategic petroleum reserves can help India withstand short-term energy supply disruptions.
• Food security is threatened by India's high import dependence on edible oils, pulses, and fertilizers.
• Fertilizer sector reforms should focus on diversifying suppliers, enhancing domestic production of phosphatic and potassic fertilizers, and promoting bio-fertilizers.
• Deepening domestic manufacturing in intermediates like APIs and semiconductors is crucial to reduce import dependence.
• Diversification through long-term supply agreements and strategic partnerships across regions is essential for supply chain resilience.

Key Concepts Involved:

• Supply Chain Resilience: The ability of a supply chain to withstand and recover from disruptions.
• Import Dependence: The extent to which a country relies on imports to meet its needs for goods and services.
• Diversification: Reducing risk by spreading investments or supply sources across different areas.