India's supply chain strategy is shifting toward self-reliance after the war in West Asia exposed critical vulnerabilities. Government departments have started work on a series of measures to increase domestic resilience and reduce vulnerabilities caused by shocks, whose frequency has increased in recent years, according to a report in the Times of India (TOI).
Import Substitution and Domestic Production
A core element of the plan is to identify 100-150 items for import substitution. The commerce and industry ministry is working on a strategy to reduce dependence on imported goods, officials told TOI. In some cases, tools such as minimum import price are being examined to check cheap imports from China. The government is also prioritising the boosting of active pharmaceutical ingredients (APIs) production and the entry of cheap shipments is being monitored.
Energy Security Measures
Energy is at the top of the agenda. Measures to increase the green hydrogen footprint, bolster solar and green energy, especially storage capacity, are being taken up on a war footing. The roadmap worked out at the PMO's behest is being implemented through ministries, with regular monitoring by top officials from Seva Teerth, sources told TOI. The plan itself was developed over eight to 10 weeks and includes immediate steps to ensure the economy is not hit by shortages of energy or raw materials from West Asia.
| Measure | Objective | Timeline / Status |
|---|---|---|
| Import substitution (100-150 items) | Reduce import dependency | Under examination |
| Boost green hydrogen, solar, storage | Increase renewable energy capacity | War footing |
| Reduce LPG reliance, expand piped natural gas | Diversify energy sources | Prioritised |
| Coal gasification for fertiliser plants | Reduce fertiliser imports | Cabinet approved; 6-7 projects to be pushed |
| Step up oil and gas exploration | Domestic energy production | Plan to be announced by petroleum ministry |
| Rare earth and critical minerals (Assam-Nagaland MoU) | Secure critical inputs | Initial steps |
| Ethanol blending | Renewable fuel | Calibrated increase |
| EVs for public transport and long-distance trucking | Reduce oil dependence | Boost expected |
Diversifying Export Markets
On the export front, the government is keen to derisk and reduce dependence on a few geographies after the tariff turbulence faced by Indian business from US actions last year. Principal secretary Shaktikanta Das, commerce secretary Rajesh Agrawal, and foreign secretary Vikram Misri have held detailed consultations with missions across the world on the issue, as India also seeks to be part of multiple global value chains.
PLI Scheme Review
The government is conducting a review of the Production Linked Incentive (PLI) scheme. An analysis is being done by NITI Aayog and IIM Ahmedabad to learn from failures in some sectors, such as advanced chemistry cell and battery manufacturing, and build on successes in electronics, pharma, and white goods.
What This Means for Your Procurement Team
Procurement leaders should monitor which of the 100-150 items targeted for import substitution affect their supply base. The government's push for domestic production may create new sourcing opportunities but also introduce transition risks. The focus on APIs and chemicals will be critical for pharmaceutical buyers. Energy-intensive operations should prepare for potential shifts in fuel sourcing as LPG reliance may decrease and piped natural gas penetration increases. The PLI scheme review may signal changes in incentive structures, particularly for battery manufacturing, which could affect investment plans. Diversification of export markets means that suppliers exposed to US tariffs may need to adapt to new trade flows. The proactive engagement with global missions indicates that new trade corridors are being explored.
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