Building Resilient and Sustainable Supply Chains Globally

The past few years have witnessed a multitude of geopolitical events that have had a significant impact on global trade agreements and supply chains. These events, coupled with the evolving sustainability policies and regulations, have created a fragile global value chain. In this article, we will explore the implications of these events and the lessons we have learned in terms of reducing inequality and ensuring sustainable practices.

It is crucial to recognize that when we speak of the global North and global South, we are acknowledging the existing divide and inequality between the two. While sustainability regulations and policies are well-intentioned, they must be assessed to determine whether they contribute to reducing or exacerbating inequality. Additionally, it is essential to consider the preconditions required to prevent further inequality and whether these have been adequately addressed.

Furthermore, the dialogues and consultations between stakeholders, particularly partner countries, need to be emphasized. For example, the carbon border adjustment has greatly affected India's seed exporters, highlighting the need for effective dialogue before implementing such regulations. This dialogue allows affected parties to prepare and adapt, ensuring a smooth transition.

Moreover, it is crucial to consider the resilience of small and medium-sized enterprises (SMEs) in the face of sustainability regulations. While it is the responsibility of the governments in the countries where these SMEs are located to support them, it is also the duty of the governments implementing the regulations to ensure these SMEs can withstand the changes. It is important to note that SMEs are often more significantly impacted by sustainability measures than larger corporations. Therefore, both host and implementing countries must collaborate to ensure a fair and resilient transition.

Additionally, when foreign companies manufacture in other countries, it is essential to examine whether they adhere to the same sustainability practices they implement in their home countries. In the case of India's Production-Linked Incentive (PLI) scheme, it is crucial to ensure that all manufacturers, regardless of their origin, follow sustainable practices. The observance of sustainable practices is even more critical than regulations themselves, as it sends a strong signal and encourages global adherence to sustainability.

Furthermore, supply chains are dynamic, and technology plays a significant role in their functioning. The adoption of technology can contribute to the sustainability of supply chains. However, it is crucial to assess whether the chosen technology aligns with sustainability goals. This assessment should equally apply to domestic manufacturers. If the technology chosen demonstrates a higher level of sustainability, it will strengthen the overall sustainability of the supply chain. However, this evaluation process should be more transparent to reinforce accountability.

Finally, it is vital to consider the sustainability of the products and services being exported from one country to another. While supply chains may operate under sustainability measures, the end-use of these products can have significant environmental consequences. It is essential to evaluate whether the consumption of these products aligns with sustainability goals and does not undermine the efforts made to ensure a clean and sustainable supply chain.

In conclusion, geopolitical events and evolving sustainability policies have highlighted the fragility of global supply chains. The lessons learned from these events emphasize the importance of reducing inequality and ensuring sustainable practices. Robust dialogues between stakeholders, considerations for the resilience of SMEs, adherence to sustainable practices across all manufacturing locations, and careful evaluation of technology and end-use of products are essential components of building resilient and sustainable supply chains.