To survive the global pandemic, multinational corporations (MNCs) have had to find newer ways of conducting business for survival and growth. Rising protectionist policies, regulatory scrutiny, the likelihood of abrupt disruptions like COVID-19 and restrictions on foreign investments are directly impacting their supply chain strategies. From diversification to reshoring and from regionalisation to risk mitigation, policies have been tweaked and processes overhauled.
Now, more than ever, CXOs are making tactical and operational changes to navigate through this highly uncertain, fast-changing global environment and meet the needs of a vastly evolved business landscape. In this process, they are seeking expert advice to limit and manage disruption, mitigate risk, and build resilience and agility.
KPMG in India has been closely monitoring the shifting investment trends and supporting clients in their supply chain diversification strategies. Through focussed efforts, we are helping clients identify key risk areas complicating strategic transformation to attain business continuity and resilience. Our efforts are channelised to help clients get forward looking perspectives on areas related to:
- Identifying new supply bases in alternative jurisdictions
- Shortlisting the right set of partners for sourcing/manufacturing
- Navigating complex tax and regulatory procedures across jurisdictions
- Devising risk mitigation strategies to reduce transition-related disruptions
- Building a supplier development roadmap for operating in a new jurisdiction
- Advising on investment in technology and processes to become future ready.
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Global production networks are complex, sophisticated, inter-dependent and deeply entrenched, making reconfiguration a challenging task. Aside from the immediate goal of restarting operations, businesses now have to contend with assessing the risk exposure, supply alternatives, tax considerations and channel complexities. Matters, such as governance and regulatory adherence, use of digital technology and analytics, implementation priorities and roadmaps - all need detailed study and domain knowledge. We are here to help as your advisor. At KPMG in India, we use our significant subject matter expertise and multidisciplinary advisory services to demystify the complex implications of a decision to rebalance supply chains.
India advantage
India, much like other emerging economies, is exploring ways to build its investment attractiveness and to make it a viable contender for global manufacturing/sourcing. The government's investment-driven policy measures along with corporate tax cuts, investment in infrastructure under the National Infrastructure Pipeline (NIP) and business-friendly changes to labour laws are likely to further underpin India’s attractiveness as a global manufacturing hub.
Notable government reforms *
- Launched the Atmanirbhar Abhiyan scheme, estimated at USD265 Bn
- Introduced the Product linked incentive (PLI) with an outlay of USD27 Bn for 13 sectors
- Set up a USD1.4 Tn National Infrastructure Pipeline (NIP) for infrastructure development
- Launched the Export Promotion Capital Goods (EPCG) scheme for duty-free import of capital goods
- India, Japan, and Australia launched the Supply Chain Resilience Initiative (SCRI) to build resilient supply chains in the Indo-Pacific region
- Launched the PM Gati Shakti National Master Plan, powered by clean energy and driven by seven engines, namely roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure.
What makes India a favourable manufacturing destination?
Sectors of strategic importance - An overview
Sectors of emerging importance in India
KPMG In India’s Supply Chain offerings:
We understand the complexities of today’s volatile and high-risk business environment. Our team of experienced professionals work across geographies and sectors to support organisations with comprehensive offerings and a value-driven approach specifically revolving around the following areas:
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KPMG in India contacts
Sources:
* Invest India accessed on January 25, 2022
1. Invest India and Make in India accessed on January 25, 2022
2. Report on Production Linked Incentive Scheme for Large Scale Mobile and Component Manufacturing by Ministry of Electronics & Information Technology, Government of India, September 2021
3. Invest India report Inside India Production Linked Incentives Schemes: White Goods
4. Production Linked Incentive Scheme for Food Processing Industry accessed on February 3, 2022
5. Nine PLI schemes have been approved by the cabinet so far, Ministry of Commerce & Industry, 07 APR 2021
Guidance note to readers: We have relied on secondary sources which are considered reliable but have not independently verified the data. KPMG shall not be liable and/ or responsible for any reliance placed on the content of the website.