India needs to look at GVCs in critical areas to ensure resilience against shocks: Department of commerce's Rajesh Agrawal

Building resilience for future shocks

India needs to look at global value chains (GVCs) in critical areas to ensure resilience against all kinds of shocks, be it geopolitical or climate-related instances, Rajesh Agrawal, additional secretary, department of commerce, said at the 21st Global MSME Business Summit 2024 organised by Confederation of Indian Industry on December 16.

“Covid has taught us that cost is not everything; it's one of the variables but not the variable. We need to look at GVCs in critical areas so that we are resilient against any shocks. We need to diversify our sourcing, even if it adds to the cost,” Agrawal noted.

Talking about competition in the space, Agrawal noted that while it is not easy to compete with a manufacturing sector that’s 20 years ahead, the good news was that consumers across the world were getting tired and they want change.

“We need to start thinking differently,” he noted while pointing to the fact that companies also needed to look at circularity.

“Circularity is one area where MSMEs can drive growth; they can help mitigate that challenge to some extent,” the additional secretary pointed out.

Agrawal also highlighted that the government was trying to ensure that there was no inequity in trade.

“We are trying to ensure that there is not more inequity in trade so that our exporters and manufacturers are able to move to international standards,” he pointed out.

However, he said there was also a need from the industry side to start work on sustainable frameworks for the future.

“We need to insulate and create more sustainable global supply chains. We need to look at what others are doing,” he said.

He also said that there was a change in approach for the government, where it was trying to look at free trade agreements from the perspective of MSMEs.

“MSMEs are an important part of the manufacturing, trade and employment ecosystem and are key to our sustained growth of the country. Information asymmetry needs to be removed. We are trying to negotiate with our FTA partners, keeping MSMEs as a separate chapter,” Agrawal said.