Wider sourcing and shipping, better emergency preparedness: what India Inc learnt from conflict with Pakistan

Industry experts say that companies should widen sourcing networks and open up more channels for shipping

Even as a fragile ceasefire seems to hold after clashes between India and Pakistan in the aftermath of India's retaliatory airstrikes to the Pahalgam attacks, industry insiders say that Indian corporates can use the opportunity to beef up their emergency preparedness procedures, and widen their sourcing and shipping networks for better supply chain management, in case of such crises in the future.

"The recent events posed by drone and missile attacks, have underscored the urgent need for India Inc. to revisit its crisis preparedness and business continuity frameworks, particularly in the areas of logistics and supply chain management. The role of logistics companies is not limited only to supplying raw materials to factories and delivering finished goods to shelves and consumer doorsteps; rather, they are being increasingly looked at as an enabler for executing complex modern trade and commerce which involves multiple stakeholders who are totally dependent on each other," said Ketan Kulkarni, managing director of logistics firm Gati Express and Supply Chain.

However, companies, especially those in the logistics and warehousing segments, noted that with a wide and diversified economic footprint of almost all major corporates in India, quickly shifting supply chains or logistics is "almost impossible", and mitigatory measures are the only way forward.

"During the recent crisis, we ensured that the employees who work at our warehouses are safe and have the resources that they might need to tide through the crisis. We have clients and warehousing facilities all across India, and we were on the top of the situation at all times. However, it is very difficult to radically change warehousing locations due to their size and the volume of inventory that those facilities have," said a source from a major warehousing firm in India.

The closure of almost all airports in northern India, except Delhi, over the past four to five days, has also significantly impacted exports that require air cargo routes rather than shipping lines.

According to a logistics industry insider, major players in the opticals industry in Europe, which fill their prescriptions from optical product manufacturers in India, faced significant issues and delays in shipping their supplies from various northern India airports as they were shut for civilian and cargo traffic. Some manufacturers had to ship the inventory from southern airports, while others were delayed due to logistical issues.

Industry figures say exporters may revisit their dependency on northern Indian airports, especially after the recent disruptions.

"Recent regional developments highlight the importance of having a resilient and flexible logistics strategy. With most Indian exports headed to the Middle East, Europe, and the United States, tapping into southern and western gateways can help businesses (reliant on northern airports or freight corridors) ensure greater agility and continuity in reaching these key markets," said Bhavik Vora, partner and logistics and transportation industry leader at Grant Thornton Bharat.

Even for shipping routes, Export-Import (EXIM) players and ports in India have been facing the risk of shipment delays, surge in insurance and shipping rates and the threat of overhanging US tariffs.

Heightened tensions between India and Pakistan have begun to significantly disrupt regional trade, as major global shipping lines suspend services to Karachi Port and reroute cargo to alternative points.

A vital trade corridor through the Mundra Port in Gujarat, commonly used for European-bound shipments from its vast hinterland in northern India, was effectively been shut down from May 8 to May 12. Large shipping firms, like COSCO and CMA CGM, have rerouted traffic to ports in Malaysia, or have imposed surcharges for all trade involving ports in Pakistan.

Crucial now, industry figures say, is to exploit built-for-freight routes, such as the Dedicated Freight Corridors, new highways, and expanding the network for airports and ports. However, with most ports on the western coast of India operating at or near capacity, it is vital to open up new shipping routes, especially deep sea ports on the western coast of India, in case of a longer conflict or a full-scale war, according to Grant Thornton's Vora.

"On the maritime front, ports such as Kandla and Mundra in Gujarat play a vital role in managing freight movement from North India. However, they are also critical nodes that could face pressure in times of disruption. Mumbai and JNPT ports are already operating at near full capacity, limiting their ability to absorb sudden shifts in cargo volume. This is where the upcoming Vadhavan Port in Maharashtra becomes particularly strategic. As a planned deep-sea port, Vadhavan is well-positioned to act as an alternative evacuation and entry point for cargo, especially during periods of high demand or regional contingency. Accelerating its development could significantly strengthen India’s port infrastructure and improve logistics resilience across sectors," Vora said.

(with inputs from Yaruqhullah Khan)