Realign supply chains, avoid risk concentration: FM Sitharaman to cos – Times of India

NEW DELHI: Finance minister Nirmala Sitharaman on Wednesday suggested business to realign its supply chain factoring in political and strategic concerns to be sure that there was no focus of dangers, an announcement that appeared to be aimed toward China.
“When you talk of supply chains, when you want to restore supply chains to frictionless supply chains, let’s not forget, it’s not just economics, it’s more than that. When we want to de-risk ourselves, when we want to remove certain concentrations , plus one, plus two, what are these theories? They didn’t emerge out of economic principles. Therefore, we have to build into our own decision making not just economic sense, but also political and strategic sense.

“Supply chains could have to be restored, however you’d reset it, you’d realign it, you’ll make it possible for they’re unfold a lot that no political or geo-political or strategic dangers will threaten our properly-being,” FM said. at a CII event.
The statement came amid repeated demands from industry to lift restrictions on Chinese investment and visas that came following the outbreak of Covid and the subsequent tension in Ladakh. In fact, the Economic Survey also had made a case for lifting investment curbs. While the border stand-off has eased, business ties have not normalised, and industry players are clamoring for a softer stance despite government’s clear emphasis on building a resilient supply chain with other countries and locating production facilities in India through schemes such as production linked incentives. .
Sitharaman also used the platform to underline the need to check unnecessary expenditure and borrowings. “Responsible economies cannot be run with borrowings so massive that the subsequent technology and the technology after which have to repay. All it will have to be handed by way of as taxation… Debt is required however on this coming decade our precedence must be to handle the funds and borrow for constructing belongings, borrow for managing higher, but it surely can’t be such borrowings that you simply depart the subsequent technology frightened about how to service it.”
Besides, she flagged global conflict and inflation as major global concerns.
“Inflation is so contagious that nowhere is any nation’s effort right this moment is totally profitable, as a result of past its powers are inflation, forces which are available,” she said amid conflicts in West Asia and Ukraine, which have disrupted supply chains and stoked inflation in several parts. of the world. The comments come at a time when central banks in several countries have reduced key policy rates, while RBI has so far maintained a status quo in the wake of higher inflation.
The try of each business & govts all over the place must be to restore international calm and normalcy. There can nowhere be sufficient justifiable motive for skirmishes or conflict. The international precedence for this decade must be to restore normalcy. They are the primary trigger for disruptions in supply chain, inflation and different international challenges.”