Time For Industry to Lead Economic Resilience

The ongoing crisis in West Asia has once again reminded us of a defining feature of the global economy today: shocks are no longer rare events. They are frequent, multi-dimensional and often simultaneous.

In this context, India’s response to the current crisis has been timely and reassuring. The Government has acted swiftly to stabilise the situation, focusing on ensuring energy availability, supporting exports, maintaining supply chains and protecting vulnerable households.

However, public policy can only go so far. The next phase of the response must come from industry itself.

The first responsibility before industry is to support price stability. When the Government takes steps to moderate fuel costs and logistics pressures, it creates an opportunity for firms to pass on these benefits across the value chain. Doing so is not only fair to consumers, it also helps anchor inflation expectations and sustain demand.

Equally important is the responsibility to protect livelihoods. The current disruption is external and, in many cases, temporary. It should not translate into permanent job losses. Firms that are able to manage costs through internal efficiencies and operational flexibility can play a crucial role in maintaining employment stability. This is particularly important in labour intensive sectors, where the ripple effects of job losses are wide and immediate.

A third area is in supporting MSME partners. Smaller enterprises often operate with limited buffers and are more vulnerable to disruptions in cash flow and logistics. Timely payments, better credit terms and clearer visibility on orders from larger firms can help sustain entire supply chains.

Stocking critical materials

The crisis has also highlighted the need for stronger supply chain resilience. Diversifying sourcing strategies, building alternative corridors and maintaining prudent inventory buffers for critical inputs are no longer optional strategies. Closely linked to this is the need to build strategic reserves. Traditionally, stockpiling of critical materials has been seen as a public sector function. That approach needs to evolve. Industry has both the capability and the incentive to participate in building distributed buffer systems for key inputs, fuels and intermediates. A collaborative model, where Government and industry share information and infrastructure, can significantly enhance national preparedness.

Energy resilience is another area where industry action will be decisive. Accelerating investments in renewable energy, improving industrial energy efficiency and exploring viable alternatives such as green hydrogen will not only reduce costs over time, but also strengthen long term competitiveness. Where feasible, a gradual shift from LPG to natural gas and increased electrification of processes can further improve stability.

Even smaller operational decisions can add up. Businesses that operate large kitchens and institutional facilities can adopt more energy efficient cooking systems, explore alternative fuels and optimise consumption patterns. These may appear incremental changes, but at scale, they contribute meaningfully to national energy conservation.

At the same time, companies must strengthen their internal risk management frameworks. This includes better insurance coverage, more robust logistics planning, disciplined receivables management and prudent foreign exchange practices.

Technology will play an increasingly important role in this transition. Investments in data systems, supply chain visibility tools and real time monitoring can help firms respond faster and more effectively to disruptions. Digital capabilities can significantly reduce the lag between a shock and the corresponding business response.

Finally, there is a need for continuous and constructive engagement between industry and Government. Real time feedback on bottlenecks, shortages and emerging risks can help shape more responsive policy interventions. This two way communication is essential for ensuring that policy measures remain aligned with ground realities.

Note: This article was first published in The Hindu Business Line