Commerce Secretary Rajesh Agrawal addresses Indian automobile industry on supply chain resilience, global value chain integration, and reducing dependency on concentrated suppliers during SIAM's 65th annual convention.
11 Sep 2025 | 2096 Views | By Kiran Murali
Amid recent disruptions in the global automotive supply chain, Commerce Secretary Rajesh Agrawal on Thursday highlighted the need for the Indian automobile industry to take the lead in building resilient supply chains and work with developed economies to anchor global value chains in the country.
"For growth to take ...
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Amid recent disruptions in the global automotive supply chain, Commerce Secretary Rajesh Agrawal on Thursday highlighted the need for the Indian automobile industry to take the lead in building resilient supply chains and work with developed economies to anchor global value chains in the country.
"For growth to take place, we not only need investments, we need technology, we need global partnerships in a manner where global supply chains start getting anchored in India," Agrawal said while speaking at the 65th annual convention of SIAM, noting that India's participation in global value chains (GVCs) remains relatively low.
He noted that India is involved in global supply chains, but not as much as developed countries. "Today we are part of global supply chains but our participation in GVCs is much lower than what we see in developed countries. Around 30-40% of our exports are part of the global supply chains and in many areas, we are not that well integrated with the global supply chains," he said.
He added that India now needs to step up partnerships with advanced economies. "It is time that India also starts working with developed economies and starts working in a manner where we are able to integrate with them which can enable our industry also to leverage partnerships with the global giants and see how we can become a more integral part of global supply chains."
Agrawal said that as global supply chains undergo realignments, India has a strong opportunity to benefit from economies of scale and deeper integration with developed markets. He stressed that India must take a proactive role now if it wants to become a dominant player in these evolving global value chains.
"I think one of the key learnings that we have learned in the last few months has also been the need to ensure that our entire supply chain has enough resilience while creating domestic capacities and world-class manufacturing ecosystems in the country," Agrawal said.
He also cited the case of permanent magnets supply as a reminder of the risks of concentrated supply. "The challenge that we are facing in this sector is only because the supply chains of some materials like permanent magnets are so controlled that if any country which is controlling the supply chain desires to weaponize the supply chain or use the supply chain for their geopolitical reasons or some other reasons, it becomes very difficult for any other country to sustain its automobile sector or many other sectors also which have a potential role to play."
He described the situation as a much-needed "wake-up call" and urged the industry to act by reviewing the entire supply chain, identifying weak links where supplies are limited or concentrated, and addressing risks through diversification of the supply chain or localizing critical components.
"Resilience, to my mind, does have a cost, and we need to be far-sighted in bearing that cost and not being short-sighted in going for the cheapest or what is cheaply available at the current point in time. If a long-term resilient supply chain has an additional cost, I think we need to find ways to provide for that also because that is in our best interest in the long run," he added.