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India is among a group of nearly 30 countries working to develop supply chain networks that reduce dependence on China, reflecting a broader global shift toward diversified sourcing and resilient manufacturing ecosystems amid rising geopolitical and trade uncertainties.
The initiative, involving several advanced and emerging economies, is focused on strengthening alternative production and sourcing arrangements across sectors considered strategically important, including electronics, critical minerals, semiconductors, pharmaceuticals and clean energy technologies.
Officials associated with the discussions said participating countries are exploring frameworks that would allow businesses to spread manufacturing and procurement operations across multiple geographies rather than relying heavily on a single market. The move is aimed at reducing vulnerabilities exposed during recent global disruptions, geopolitical tensions and trade restrictions.
India’s participation aligns with its ongoing efforts to position itself as a manufacturing and export hub for multinational companies seeking to diversify operations outside China. Over the past few years, New Delhi has introduced production-linked incentive schemes, expanded logistics infrastructure and accelerated trade negotiations to attract global supply chain investments.
The shift toward “China-plus-one” sourcing strategies has gained momentum among global manufacturers and logistics operators following supply chain disruptions that affected shipping schedules, industrial output and inventory availability across major economies. Industry analysts say companies are increasingly prioritising supply chain resilience alongside cost efficiency when making investment decisions.
For India, the emerging realignment presents opportunities in sectors such as electronics assembly, automotive components, pharmaceuticals, textiles and renewable energy equipment. However, experts note that sustaining long-term gains will depend on improvements in logistics efficiency, port connectivity, regulatory predictability and manufacturing competitiveness.
The evolving supply chain framework also reflects broader geopolitical considerations, as several countries seek to reduce exposure to concentrated sourcing risks in strategically sensitive industries. Governments involved in the initiative are expected to collaborate on trade facilitation, investment partnerships and technology cooperation to strengthen alternative industrial networks.
Logistics and trade stakeholders say diversified manufacturing patterns could reshape cargo flows across Asia over the coming decade, increasing demand for multimodal transport infrastructure, warehousing capacity and port-led industrial development in emerging production centres such as India and Southeast Asia.
While China is expected to remain a dominant force in global manufacturing, analysts believe multinational corporations are likely to continue distributing production across multiple countries to mitigate operational and geopolitical risks. India’s inclusion in the coalition underscores its growing role in global supply chain restructuring and regional trade integration.
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The recently announced $5.1-billion transaction between Dana Incorporated and Eaton Corporation is being viewed by industry stakeholders as a development that could reshape the future of India's automotive supply chain, particularly in the commercial vehicle and electric mobility segments. The deal will combine the mobility businesses of the two companies, creating a global supplier with annual revenues exceeding $11 billion and an extensive portfolio spanning conventional and electric powertrain technologies. For India, where vehicle manufacturers are simultaneously pursuing localisation, electrification and export expansion, the merger arrives at a particularly important moment. Industry experts believe the significance of the deal extends beyond its financial size. Traditionally, automotive manufacturers have relied on multiple suppliers for key vehicle systems such as drivetrains, transmissions, thermal-management solutions and electrification components. Integrating these technologies has largely remained the responsibility of original equipment manufacturers (OEMs). The combined Dana-Eaton entity could change that dynamic by offering a broader suite of solutions through a single platform. Dana brings capabilities in axles, driveshafts, thermal systems and e-axles, while Eaton contributes expertise in transmissions, clutch systems and electrification technologies. Together, they are expected to offer more comprehensive powertrain solutions that could simplify product development for vehicle manufacturers. Experts suggest this reflects a broader global trend in which suppliers are evolving from component providers into technology partners capable of delivering complete vehicle systems. The merger could prove especially relevant for India's commercial vehicle sector, where electric mobility adoption is still developing compared to passenger vehicles. Buses, trucks and light commercial vehicles operate under demanding conditions that include heavy payloads, high ambient temperatures and dense urban traffic. These requirements place unique demands on electric drivetrains and thermal-management systems. Industry analysts believe the combined technological strengths of Dana and Eaton may help manufacturers develop more robust electric commercial vehicles tailored to Indian operating environments. The ability to source multiple critical technologies from a single engineering partner could also reduce complexity for OEMs and potentially accelerate product development timelines. As fleet operators increasingly evaluate electric alternatives, integrated solutions are expected to become a key differentiator in the market. Another area attracting attention is the potential impact on localisation. Both Dana and Eaton already maintain manufacturing and engineering operations in India. Analysts expect the merged organisation to leverage these capabilities further as it seeks efficiencies, cost optimisation and supply-chain resilience. India's growing importance as a manufacturing destination, coupled with government initiatives aimed at boosting domestic production, makes the country an attractive base for future investment. Industry observers believe the consolidation could encourage additional localisation of advanced automotive technologies, reducing dependence on imported systems and strengthening domestic value creation. There is also potential for India to expand its role as an export and engineering hub within the global automotive ecosystem as suppliers continue to optimise production networks worldwide. While the merger presents several opportunities, experts caution that increased supplier consolidation could alter the balance of power between OEMs and component manufacturers. A larger, more diversified supplier may possess stronger negotiating leverage, particularly in specialised areas such as commercial vehicle powertrains and advanced electrification technologies. Automakers could benefit from simplified sourcing and engineering efficiencies, but may also find themselves dealing with fewer large-scale suppliers capable of offering end-to-end solutions. Nevertheless, analysts see the transaction as an indication of where the industry is headed. The automotive supply chain is increasingly moving toward larger technology-driven organisations that can deliver integrated systems rather than standalone components. As India's automotive sector continues its transition towards cleaner mobility, local manufacturing and global competitiveness, the Dana-Eaton combination could emerge as an influential force shaping that evolution. For Indian OEMs, suppliers and policymakers alike, the merger serves as a reminder that the next phase of automotive growth will be driven not only by vehicles themselves, but also by the increasingly sophisticated ecosystems that support them. For more such news and updates, visit CARGOCONNECT.
India’s engineering goods exports climbed to a record $122.43 billion in the 2025-26 financial year, reinforcing the sector’s position as the country’s largest contributor to merchandise exports and highlighting growing demand for Indian-manufactured products in global markets. The engineering sector accounted for nearly one-fourth of India’s total merchandise exports during the fiscal year, supported by strong overseas demand across key product categories, including industrial machinery, transport equipment, electrical goods, iron and steel products, and auto components. Export growth was driven by increased shipments to major markets such as the United States, the United Arab Emirates, Saudi Arabia, the United Kingdom and several European countries. Industry data indicated that engineering exports maintained momentum despite ongoing geopolitical tensions, supply chain disruptions and uncertain economic conditions in some regions. The strong performance comes as manufacturers continue to expand production capabilities and diversify export destinations. Improved market access, government-led trade initiatives and a gradual recovery in industrial activity across several economies also contributed to higher outbound shipments. Industry stakeholders said the engineering sector has become increasingly competitive in global markets, benefiting from investments in technology, manufacturing efficiency and product quality. Rising exports of capital goods, machinery and transport-related equipment have further strengthened the sector’s international presence. The record export figures are expected to support cargo volumes across ports, container terminals and multimodal logistics networks, given the engineering industry's heavy reliance on international transportation and supply chain infrastructure. Growth in engineering exports also creates additional demand for freight forwarding, warehousing and customs clearance services. Looking ahead, exporters remain cautiously optimistic about sustaining growth, although challenges such as fluctuating freight rates, trade policy changes and global economic uncertainty could influence demand in the coming months. The latest export performance underscores the increasing role of India’s manufacturing sector in global supply chains and its expanding footprint in international engineering and industrial goods markets. Follow CARGOCONNECT for more such updates.
India has significantly expanded alternative maritime services connecting West Asia and global markets as prolonged disruptions in and around the Strait of Hormuz continue to reshape regional shipping patterns. According to data from the Ministry of Ports, Shipping and Waterways, the number of shipping services operating through routes east of Hormuz and via the Red Sea increased from 127 services in February to 257 in April before moderating slightly to 245 in May. The increase reflects a broad shift by carriers and cargo owners seeking to maintain supply chain continuity amid ongoing geopolitical instability in the Gulf region. The rerouting trend highlights the growing reliance on alternative maritime corridors as traditional Gulf shipping routes face operational uncertainty. Logistics providers, shipping lines and exporters have been adjusting network plans to avoid delays, higher risk exposure and rising insurance costs associated with transits through the affected area. Government officials said the expansion of alternative services is helping sustain trade flows between India and key markets in West Asia despite continued disruption to one of the world's most strategically important maritime chokepoints. The Strait of Hormuz normally handles a substantial share of global energy and container traffic, making any restriction or reduction in vessel movements a major concern for international supply chains. The shift is also driving broader changes across India's maritime sector. Ports on the country's western coast have increasingly handled transshipment cargo and feeder services as shipping lines redesign networks to connect with alternative regional hubs. Industry stakeholders report that cargo previously moving directly through Gulf gateways is increasingly being routed through intermediary ports and feeder networks to reach final destinations. Shipping companies have faced mounting operational challenges since tensions escalated in the region. Vessel diversions, longer transit times and elevated war-risk insurance premiums have increased transportation costs and complicated scheduling for exporters and importers. Some operators have also explored multimodal alternatives combining sea and land transport to maintain cargo flows into Gulf markets. Industry executives say the expansion of alternative services demonstrates the shipping sector's ability to adapt to geopolitical disruptions. However, they caution that sustained instability could continue to pressure freight networks, port operations and supply chains across the wider region. The development underscores how regional conflicts are accelerating structural changes in shipping networks, with carriers increasingly diversifying routes and reducing dependence on a single maritime corridor to ensure supply chain resilience. Follow CARGOCONNECT for more such updates.
