The West Asia conflict is disrupting global supply chains and energy markets, says CII. Indian firms face shipment delays and material shortages, but India's strong reforms and government response are helping to manage the economic shock.
The ongoing conflict in West Asia is disrupting global supply chains and putting pressure on energy markets, affecting imports and exports worldwide, according to the Confederation of Indian Industry (CII).
In a statement, Chandrajit Banerjee, Director General of CII, said the tensions in the region have impacted critical maritime routes and created ripple effects across industries. "The conflict in the Middle East has disrupted critical maritime routes and placed pressure on global supply chains, energy markets, and both imports and exports," Banerjee said.
Impact on Indian Companies
He added that Indian companies are already witnessing operational challenges due to delays and shortages in key inputs. "Indian companies are experiencing downstream effects, from shipment delays to constraints in key energy inputs, as well as emerging shortages in essential raw materials and intermediates across several sectors that rely heavily on timely cross border flows," he said.
India's Resilient Position and Response
Despite the challenges, Banerjee noted that India entered the current situation from a strong position due to reforms and the government's push for self-reliance. "India, however, entered this period from a position of strength, supported by sustained reforms and the Government's emphasis on Atmanirbharta, which have significantly enhanced the economy's self-resilience," he said.
According to him, the government and industry have responded quickly to manage the evolving situation. "The response from Indian Government and Indian industry has been quick, calibrated and continuous as we move along," Banerjee said.
Key Government Initiatives
He highlighted several measures taken by the government to address the impact of the crisis. "The Government has moved decisively on several fronts -- crude diversification, LPG production maximisation, export facilitation and currency stabilisation," he said.
Accelerating Sustainable Energy Transition
Banerjee said the situation also underscores the importance of accelerating India's shift towards sustainable energy. "This situation reinforces the strategic importance of accelerating India's transition towards sustainable and self-reliant energy systems," he said.
He added that investments in renewable energy and alternative fuels will help reduce vulnerability to geopolitical shocks. "India's ongoing investments in renewable energy, green hydrogen, biofuels, and energy efficiency are not only climate commitments but also strategic imperatives that reduce exposure to geopolitical energy shocks," Banerjee said.
Industry Adaptation and Government Support
The CII Director General said Indian industry is actively adapting to the challenges by diversifying energy sources and strengthening supply chains. "Indian Industry is not a passive recipient of these shocks. It is actively accelerating energy diversification, optimising supply chains and protecting jobs," he said.
He also welcomed the government's industry support measures aimed at helping companies manage operational pressures. "The Government's industry-supportive measures, such as RELIEF to help companies manage operational pressures, is very timely," Banerjee said.
Collaborative Efforts and Outlook
CII said it is working closely with the government and industry stakeholders to monitor the situation and address supply chain vulnerabilities. "CII continues to work closely with the Government and industry to monitor supply chain vulnerabilities, address raw material and intermediate shortages, and provide real time feedback from affected sectors," Banerjee said.
Expressing confidence in India's ability to manage the crisis, he said the country's coordinated response would help sustain economic momentum. "While the situation remains challenging, we are confident that the Government's whole of government approach, combined with its partnership driven engagement with all stakeholders, will help India withstand this shock and preserve its forward economic momentum," he added. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)