CII: Government's Response & Industry Steps for Supply Chain Resilience

CII Praises Government Response to West Asia Crisis, Urges Industry Action to Manage Supply Disruptions​

Coordinated Policy Measures Help Stabilize Economy Amid Global Uncertainty​

New Delhi, March 29: The Confederation of Indian Industry (CII) on Sunday commended the Indian government for its swift and coordinated response to disruptions triggered by the ongoing West Asia crisis, highlighting that timely interventions have helped stabilize key economic factors.

The industry body noted that the crisis has primarily created supply-side pressures, impacting energy costs, logistics, and working capital cycles. While immediate risks have been contained through policy measures, CII emphasized the need for continued collaboration between the government and industry to navigate the evolving situation.

CII Director General Chandrajit Banerjee stated that the government's response has been measured and reassuring, reflecting a comprehensive approach focused on maintaining supply chains, supporting exporters, and protecting households from rising global oil prices.

He added that these steps have played a critical role in containing inflationary pressures, sustaining industrial activity, and preserving economic confidence during a period of global uncertainty, while also safeguarding employment and livelihoods.

CII Recommends 12-Point Industry Action Plan​

In response to the ongoing challenges, CII has outlined a 12-point action plan for industry stakeholders to strengthen resilience and support economic stability.

The industry body has urged companies to collaborate with the government in building strategic reserves and buffer mechanisms for critical raw materials, fuels, and intermediate goods. It also called for efforts to maintain price stability by passing on the benefits of stable fuel and logistics costs to consumers.

CII highlighted the importance of diversifying supply chains through alternative sourcing strategies and vendor expansion to reduce reliance on vulnerable trade routes. It also stressed accelerating investments in energy transition, including renewable energy, green hydrogen, and energy-efficient technologies.

Companies have been encouraged to explore cleaner and more efficient fuel options, including a shift from LPG to natural gas where feasible. Businesses operating large kitchens and food services were advised to adopt innovative methods to reduce fuel consumption through electric or bio-based solutions.

The industry body also underscored the importance of protecting employment by managing costs internally to absorb temporary shocks. Larger firms were urged to support MSME partners through faster payments, improved credit terms, and better demand visibility.

Further recommendations include enhancing operational efficiency to manage fuel cost volatility, strengthening risk management practices across logistics and insurance, and investing in technology to improve supply chain visibility and flexibility.

CII also advised companies to revisit procurement and contracting frameworks to ensure greater flexibility in sourcing, pricing, and delivery timelines, thereby reducing exposure to sudden disruptions.

Government Measures Support Trade and Export Stability​

CII noted that since the onset of the crisis on February 28, the government has taken decisive steps across multiple fronts to safeguard energy supplies, stabilize markets, and support vulnerable sections of the economy.

On the trade front, measures such as the restoration of RoDTEP rates and value caps have provided relief to exporters. Additional steps to address freight and insurance challenges, including the RELIEF mechanism, have further supported export operations.

Enhanced export credit availability and expanded coverage under ECGC have also helped sustain exporter confidence, particularly among MSMEs, ensuring continuity in trade flows despite global uncertainties.

CII reiterated that sustained coordination between policymakers and industry will remain crucial in managing the ongoing supply-side challenges and maintaining economic stability.