“Friend-shoring” refers to the concept of diversifying supply chains by moving production and sourcing to countries that are politically stable, economically aligned, and often share strategic interests. India, with its large economy and strategic location, becomes a significant player in this approach.
India’s Role in Friend-shoring:
1. Economic Alignment: India, as a rapidly growing economy with a stable democratic setup, presents a viable option for countries looking to diversify away from unreliable or politically challenging sources.
2. Strategic Partnerships: India has been deepening its ties with Western economies, notably through the Quad, which includes the United States, Japan, and Australia, reflecting shared values and interests.
3. Supply Chain Resilience: Given the disruptions caused by the COVID-19 pandemic and geopolitical tensions, India is being viewed as a partner that can contribute to a more resilient supply chain, especially in critical sectors like pharmaceuticals, textiles, and technology.
4. Infrastructure Development: India’s focus on improving its infrastructure under schemes like ‘Make in India’ enhances its appeal as a manufacturing and export hub for global markets.
5. Trade Agreements: India is negotiating several trade agreements with key economic blocs and countries, further embedding itself into the global supply chain network.
6. Geopolitical Balance: Amidst the US-China trade tensions, India emerges as a balancing power that can offer an alternative to China-dependent supply chains.
India’s active participation in friend-shoring not only provides alternatives to global economies but also propels its own economic growth and strategic interests, making it a key player in the reconfiguration of global supply chains.