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India is considering a stronger supply-chain security framework after Chief Economic Advisor V. Anantha Nageswaran warned that new Chinese rules could make it harder for companies to shift supply chains away from China. Speaking at Ashoka University, he said India needs its own response to China’s Decree No. 834 and Decree No. 835, and also called for an Indian equivalent of the US CFIUS review mechanism for foreign investments.
The strategic signal is bigger than one policy comment. Nageswaran’s point is that supply-chain risk is no longer only about finding alternate factories or suppliers. It is increasingly about whether countries have the legal and institutional tools to protect diversification efforts when large economies start using regulation as leverage. He said India needs both a “blocking statute”-type countermeasure and a dedicated supply-chain security framework to operate in a more restrictive external environment.
His framing also makes clear that the global supply-chain conversation is changing. India has spent years talking about China+1 and import diversification, but the CEA’s warning suggests that moving supply chains may become harder precisely when governments want it most. He argued that India should use its market access more actively to attract companies, rather than relying only on the assumption that firms can relocate smoothly on their own.
There is a second message underneath this: policy alone will not do the job. Nageswaran also criticized Indian corporates for weak capital formation despite strong post-Covid profit growth, arguing that private investment has been too cautious even as the regulatory environment improved. That turns this into a dual challenge for India: build stronger national supply-chain defenses, while also getting domestic industry to invest more aggressively in real assets and manufacturing capacity.
Why it matters:
The next phase of supply-chain resilience may depend less on who talks most about diversification and more on who builds the legal, investment, and market-access architecture to make diversification actually stick.
