Global supply chains are shifting from “China+1” to “China+Many.” India is emerging as a strategic logistics hub, with policy reform, infrastructure investments, and evolving LSP strategies, but still faces bottlenecks in cost, capacity, and digital integration.
In the wake of geopolitical tensions, trade wars, and the aftershocks of the COVID-19 pandemic, companies worldwide are rethinking how their supply chains operate. Over-reliance on a single manufacturing base, particularly China, has exposed vulnerabilities in global trade. As a result, the “China+1” strategy has gained traction, encouraging companies to diversify their manufacturing bases beyond China. India, with its vast domestic market, strategic location, and growing industrial base, is increasingly seen as a viable alternative. Yet, while the potential is immense, challenges in logistics, infrastructure, policy, and workforce readiness remain critical to address.
Shift from China-centric supply chains
The “China+1” strategy, in essence, allows businesses to retain their operations in China while establishing additional manufacturing hubs elsewhere, mitigating risks associated with over-dependence on a single country. This approach is no longer just a theoretical strategy; it is manifesting across India’s manufacturing landscape.
Chander Agarwal, Managing Director of TCI EXPRESS, observes,
Advanced multimodal hubs and tracking systems are making Indian logistics faster
“The ‘China+1’ strategy is driving a visible shift in sourcing and manufacturing to India, with time-sensitive B2B shipments growing significantly from Tier 2 and Tier 3 hubs. Express surface, air, and rail networks are expanding rapidly to serve high-growth sectors like electronics, auto components, and pharmaceuticals. By leveraging advanced tracking systems, automated sorting centres, and multimodal hubs, faster and more reliable deliveries are becoming possible across both domestic and cross-border markets. This is positioning India as a strategic alternative in the evolving global supply chains.”
The vision is supported by Devinder Bagia, Executive Partner, Lakshmikumaran Sridharan Attorneys:
Robust infrastructure and policy reforms are vital for India’s manufacturing growth
“Despite the global turmoil in trade due to geopolitical tensions, the journey towards the China+1 strategy will only accelerate. With government policies aligned to make India a manufacturing hub for sectors such as textiles, pharmaceuticals, electronics, leather, and gems and jewellery, more multinational companies will increasingly establish bases here to ‘make for the world’ in their quest to diversify supply chains out of China.”
This dual momentum of government policy and private sector readiness is gradually positioning India as a global logistics and manufacturing hub, although the path is far from linear.
Infrastructure overhaul
Recognising that robust infrastructure is foundational to global competitiveness, India has launched transformative projects like Sagarmala, Bharatmala, and the Dedicated Freight Corridor (DFC). These initiatives aim to modernise ports, enhance road networks, and integrate multimodal transportation to ensure faster, more reliable goods movement.
Chander Agarwal emphasises the importance of such integrated infrastructure:
“India’s ports and corridors are steadily improving through initiatives such as PM Gati Shakti, Sagarmala, and the Dedicated Freight Corridor, though achieving full readiness will still take time. In the interim, integrating surface, air, and rail modes is helping deliver faster first- and last-mile connectivity, bypassing bottlenecks and ensuring time-critical shipments move without delay. With cargo volumes expected to rise sharply, the focus is firmly on building speed, reliability, and capacity well ahead of the curve.”
Dr. Ennarasu Karunesan, PhD (Maritime), Senior Leader, Maritime Transport, Ports and Logistics and Regional Director at the International Association of Ports and Harbours, Japan, elaborates on India’s maritime transformation:
Maritime and port reforms are enabling India as a China+1 alternative
“Over the past decade, India’s maritime transformation has been remarkable, reducing dependence on traditional cargo flows and positioning the country as a strong ‘China+1’ alternative. Key legislative reforms such as the Major Port Authorities Act, 2021, the Marine Aids to Navigation Act, 2021, and the Inland Vessels Act, 2021, have modernised governance, navigation infrastructure, and inland transport regulations. Initiatives like the Revised Model Concession Agreement, the Flagging Incentive Scheme, and the Recycling of Ships Act, 2019, have further boosted investment, competitiveness, and sustainability. Flagship programmes such as Sagarmala and the National Waterways Act, 2016, have strengthened connectivity, while financial support for shipbuilding and standardised vessel designs have enhanced efficiency. Together, these measures have enabled India’s maritime, port, shipping, and logistics sector to fully leverage the opportunities arising from the China+1 shift.”
Further, Dr Karunesan points out the improvements in port operations:
“Massive upgrades in hinterland connectivity through the Dedicated Freight Corridor, new trade corridors, industrial zones, and Multi-Modal Logistics Parks have brought port performance on par with global standards. A striking example is JNPA, where vessel turnaround time has been reduced to under 24 hours, compared to nearly 70 hours a decade ago. These advancements reflect resilience and position Indian ports and logistics systems to absorb redirected trade volumes with confidence.”
These infrastructure improvements, combined with policy interventions, are gradually reducing bottlenecks and building a foundation for India to absorb increased global trade flows.
Addressing policy and cost challenges
Despite progress, India still grapples with policy gaps, high logistics costs, and complex customs procedures. Chander Agarwal underscores the ongoing challenges:
“Policy gaps such as high logistics costs, complex customs procedures, and non-uniform digital processes continue to be major constraints. These are being addressed by investing in automation, enhancing regional connectivity with Southeast Asia, and developing transshipment hubs to create China-independent networks. The aim is to build resilient, technology-driven, and agile supply chains that align with India’s ambition to emerge at the forefront of global trade.”
Devinder Bagia echoes this concern, noting the need for a robust logistics backbone:
“This shift demands a robust logistics infrastructure connecting manufacturing hubs to international ports and airports, supported by road and rail networks, inland waterways, and coastal shipping with seamless last-mile connectivity. Initiatives such as Sagarmala for port development and Bharatmala for road infrastructure are set to play a crucial role in driving this logistics transformation.”
However, cost remains a significant hurdle. Bagia explains, “While logistics costs have reduced marginally by around two basis points to nearly 14 percent, they still remain higher than the global benchmark of 8–9 percent. Bringing costs in line with global norms will require substantial capital expenditure in logistics.”
Addressing these bottlenecks is vital for India to establish itself as a competitive, China-independent manufacturing and export hub.
Workforce and skills: Bridging the gap
Even with upgraded infrastructure and policy support, the availability of a skilled workforce remains a critical factor. Srinivas Krishnan, Managing Director, South East Asia, Crown Worldwide Group, highlights:
Port concentration, regulatory delays, and skill gaps still hinder India’s logistics efficiency
“Policy gaps such as delayed land acquisition, restrictive laws, and lengthy legal procedures often stall operations and escalate costs. Institutions dedicated to logistics training still fall short in equipping the workforce with the skills required to meet growing demands. Political factors at certain ports, such as Cochin, can also add operational risks. What is urgently needed are reforms with clear deadlines, which can attract sustained investments in logistics and help businesses operate smoothly. Without decisive and time-bound action, India risks falling short of its potential in the emerging ‘China+Many’ era of global trade.”
He further elaborates on the operational challenges: “Despite improvements, India’s port infrastructure remains heavily concentrated around Mumbai and Chennai, which creates logistical bottlenecks for export-import activity. Bonded warehouses continue to face delays due to unclear regulations and inspection processes. Labour skill gaps further impact efficiency and leave the system vulnerable in the event of a sudden influx of redirected trade. When compared with countries like Indonesia and Vietnam, India still has considerable ground to cover before it can fully position itself as a strong alternative.”
Addressing the workforce deficit through targeted training and skilling programmes is essential to complement infrastructure and policy reforms.
Driving efficiency
Technology plays a central role in building a resilient, China-independent supply chain. Chander Agarwal highlights the integration of digital tools and automation:
“By leveraging advanced tracking systems, automated sorting centres, and multimodal hubs, faster and more reliable deliveries are becoming possible across both domestic and cross-border markets. In the interim, integrating surface, air, and rail modes is helping deliver faster first- and last-mile connectivity, bypassing bottlenecks and ensuring time-critical shipments move without delay.”
Similarly, Bagia emphasises the role of digital coordination: “In addition, the use of digital infrastructure for coordination among logistics stakeholders, including shipping lines, customs, service providers, and freight forwarders, will be key to reducing bureaucratic red tape, minimising delays, and ensuring round-the-clock clearance. These reforms are vital to improving competitiveness and reducing logistics costs, enabling India to strengthen its position in global value chains.”
By harnessing digital technology, India can overcome longstanding inefficiencies, streamline operations, and accelerate its integration into global supply chains.
Role of LSPs
Logistics Service Providers (LSPs) are crucial to translating India’s infrastructure and policy efforts into operational efficiency. They act as the interface between manufacturers, shipping lines, and end customers, ensuring timely and cost-effective delivery.
Chander Agarwal highlights the growing sophistication of LSP networks: “Express surface, air, and rail networks are expanding rapidly to serve high-growth sectors like electronics, auto components, and pharmaceuticals. By leveraging advanced tracking systems, automated sorting centres, and multimodal hubs, faster and more reliable deliveries are becoming possible across both domestic and cross-border markets.”
LSPs are also instrumental in building China-independent networks, according to Dr Karunesan: “Logistics service providers are increasingly building China-independent networks, forging new trade routes, and enhancing multimodal capacity. These strategies are strengthening India’s role in global value chains and positioning the country as a reliable, future-ready hub for global trade.”
Through these initiatives, LSPs are enabling Indian manufacturing and logistics to compete on a global scale.
India’s path forward
India stands at a strategic crossroads, poised to emerge as a global logistics and manufacturing hub. While infrastructure upgrades, policy reforms, and technology integration have created momentum, challenges in cost, workforce, and regulatory efficiency remain.
Chander Agarwal concludes: “Policy gaps such as high logistics costs, complex customs procedures, and non-uniform digital processes continue to be major constraints. These are being addressed by investing in automation, enhancing regional connectivity with Southeast Asia, and developing transshipment hubs to create China-independent networks. The aim is to build resilient, technology-driven, and agile supply chains that align with India’s ambition to emerge at the forefront of global trade.”
Devinder Bagia emphasises continued investment: “India would need significant amounts of investments in multimodal transport with last-mile connectivity to tier 1 and tier 2 cities to cope with the rising demand for transport of goods. Major ports today are congested, and we lack 24/7 clearance at all ports, which are some of the bottlenecks in reducing the logistic costs for businesses.”
Meanwhile, Srinivas Krishnan warns of operational risks if reforms lag: “Without decisive and time-bound action, India risks falling short of its potential in the emerging ‘China+Many’ era of global trade.”
In essence, India’s future as a preferred global trade hub hinges on its ability to synchronise infrastructure, policy, technology, and workforce development. Through sustained government commitment, private sector collaboration, and agile logistics strategies, India is positioning itself to not just participate but lead in the era of de-risked global supply chains.
