India audits critical supply chains in pharma, textiles, fertilizers to mitigate West Asia war risks

Livemint - Economy · 21 Mar 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

India conducts a comprehensive supply chain audit across pharmaceuticals, textiles, and fertilizers to identify vulnerabilities and reduce import dependence amid West Asia conflict disruptions, safeguarding economic growth.

Key points

Commerce Ministry has circulated a detailed questionnaire to assess import dependencies, production metrics, and technological readiness in key sectors vulnerable to West Asia supply shocks.

Pharmaceutical sector faces acute risks with 63% of imports ($4.35 billion FY25) being APIs and bulk drugs, compounded by 40-50% price surges in critical inputs like polypropylene due to petrochemical diversions.

Fertilizer security is prioritized with India being the world's second-largest consumer and largest importer of DAP (60%) and urea/NPK (15%), heavily reliant on West Asia for raw materials like rock phosphate.

Textile industry vulnerabilities are being mapped alongside pharmaceuticals and fertilizers, given its export significance and potential raw material disruptions from the conflict region.

[GS3-Economy] The audit directly addresses India's strategic weakness in supply chain resilience, a core component of the Atmanirbhar Bharat initiative and crucial for maintaining 6-7% GDP growth targets.

Industry 4.0 readiness assessment includes automation, AI, and IoT adoption gaps, linking supply chain security with technological competitiveness under the Production Linked Incentive (PLI) scheme framework.

Force majeure clauses have been activated by major API manufacturers like Aarti Industries for the first time in 30 years, indicating unprecedented supply chain stress surpassing COVID-19 disruptions.

[GS2-Governance] The exercise exemplifies strategic policymaking under external shocks, testing India's institutional capacity for rapid data-driven decision-making in crisis situations.

Way Forward: India should accelerate API park development under the Bulk Drug Policy, diversify fertilizer sourcing through strategic mineral partnerships in Africa, and establish a national supply chain resilience council with real-time monitoring capabilities.

Key terms

Active Pharmaceutical Ingredients (APIs)

The biologically active components in drugs that produce intended therapeutic effects. India imports 63% of its APIs ($4.35 billion FY25), primarily from China and West Asia, making it a critical vulnerability for the world's pharmacy. The Bulk Drug Policy 2020 aims to reduce this dependence through production-linked incentives.

Diammonium Phosphate (DAP)

A nitrogen-phosphorus fertilizer where India has 60% import dependence. DAP security is vital for food production, with disruptions risking agricultural output and subsidy burdens. The Nutrient Based Subsidy (NBS) scheme regulates its pricing and availability.

Force Majeure

A contractual clause allowing parties to suspend obligations due to extraordinary events like wars or natural disasters. Its invocation by Indian API manufacturers reflects supply chain breakdowns exceeding COVID-19 levels, with legal implications for contract enforcement under the Indian Contract Act 1872.

HSN Code System

Harmonized System of Nomenclature, a 6-digit classification for goods in international trade. The government's demand for HSN-coded production data enables precise mapping of supply chain nodes, crucial for targeted import substitution under the Foreign Trade Policy 2023.