Intro: Global trade is shifting faster than most businesses can adapt. Rising geopolitical risks, volatile freight costs and fragmented supply chains are forcing Indian firms to rethink how they operate. In this exclusive conversation with Indiastat, trade economist Dr. Samridhi Bimal explains why resilience, smarter logistics and policy alignment will define export success. Talking to senior journalist Mahima Sharma on Socio-economic Voice, she shares the practical steps businesses can take now to stay competitive in an unpredictable global environment. Take the read...

MS: How should Indian businesses rethink risk when geopolitics can disrupt trade overnight?

Dr. Samridhi: I think Indian businesses need to fundamentally change the way they think about risk. Geopolitics can no longer be treated as an occasional external shock; it has to be seen as a core business variable that affects sourcing, logistics, finance and even market access. Recent disruptions around the Strait of Hormuz have made that very clear: one chokepoint can raise freight costs, disrupt energy supplies and transmit cost pressures across value chains almost immediately.

So the real shift is from efficiency alone to what I would call resilience-adjusted efficiency. For many years, firms optimised around just-in-time production and the cheapest available source. But in the current geoeconomic environment, that is no longer sufficient. Businesses now have to factor in disruption probability, switching costs and recovery time. In fact, recent research shows that diversification may involve some efficiency loss in the short run, but it improves resilience and welfare when the risk of large shocks is high.

Practically, this means Indian firms should conduct geopolitical stress tests—not just of Tier-1 suppliers, but also Tier-2 and Tier-3 networks, shipping routes, insurance dependence and payment channels. The key question not “where is it cheapest?” but “where is it most reliable under stress?” Diversification across suppliers, routes and partners is now a form of strategic insurance.

At the policy level, the answer is not blanket protectionism or indiscriminate reshoring. It is smarter resilience: buffering critical inputs, improving logistics visibility, strengthening trusted trade partnerships and making customs and ports more efficient. For India, this is not just a defensive challenge; it is also a strategic opportunity. In a world where reliability matters as much as cost, firms that build resilient supply chains will be far better positioned to emerge as preferred global partners.

MS: With supply chains fragmenting globally, what practical steps should Indian exporters take to stay competitive beyond the 'China+1' narrative?

Dr. Samridhi: I would argue that Indian exporters need to move beyond the “China+1” mindset because that is now merely an entry point, not a durable strategy. In a world of geoeconomic fragmentation, the real competitive advantage lies in offering higher value addition, reliability and lower trade frictions within global value chains. Recent trade analysis shows that firms are increasingly diversifying across regions rather than simply shifting production from one dominant base to another.

So the practical shift for Indian exporters is from being an assembly location to becoming a value-creating production base. That means investing in components, intermediate goods, process quality, certification and design capabilities, because moving up the value chain is what strengthens export competitiveness over time. India’s PLI framework is relevant here because it is explicitly aimed at scaling manufacturing and deepening domestic value addition across 14 sectors.

Second, exporters must reduce coordination and logistics costs, not just factory costs. Global buyers now want real-time visibility, delivery reliability and compliance transparency, which makes platforms like ULIP increasingly important.

Finally, Indian firms should leverage trusted trade corridors such as the UAE and UK, where institutional frameworks are improving market access and reducing policy uncertainty.

MS: How can India reduce overdependence on volatile trade corridors without increasing the costs of inputs and logistics for export-oriented units?

Dr. Samridhi: India can reduce dependence on volatile trade corridors without sharply raising input costs only if it follows a two-track strategy: diversify external routes, while cutting domestic logistics frictions. Recent disruptions around key chokepoints such as Hormuz show why route concentration is now a strategic vulnerability, not just a shipping issue.

But the important point is this: diversification should be done as a hedge, not as an expensive duplication of capacity. So India should operationally deepen alternatives such as the INSTC, which have been conceptualised as a multi-modal, cost- and time-effective corridor to Central Asia, Russia and Europe and the Chennai–Vladivostok Eastern Maritime Corridor. This can shorten transit time between India and Russia’s Far East from roughly 40 days to about 24 days.

At the same time, the real cost savings have to come from efficiency at home. The latest NCAER–DPIIT study is very useful here: India’s logistics cost is estimated at 7.97% of GDP, with coastal shipping at Rs. 1.80 per tonne-km and rail at Rs. 1.96, both cheaper than the road average of Rs. 3.78; importantly, multimodal rail becomes cost-effective beyond about 600 km.

So the policy answer is more precise: use rail and coastal shipping for long-haul bulk movement, road for first and last mile, digital platforms like ULIP for visibility and alternative overseas corridors as strategic insurance. That is how India can build resilience without pricing its exporters out of global markets.

MS: What urgent trade policy tweak /tweaks could unlock faster export growth in the next 12–18 months?

Dr. Samridhi: If I had to choose one high-impact trade policy move for the next 12–18 months, it would be to fast-track a DESH-style or SEZ 2.0 reform that converts India’s export zones from rigid enclaves into scale-efficient production hubs. The original policy direction was clear as early as Budget 2022, which proposed replacing the SEZ Act with a new framework for “Development of Enterprise and Service Hubs.” More recently, however, the reform path appears to have shifted from the stalled DESH Bill toward SEZ amendment-based reform instead.

Why is this the most urgent tweak? Because the fastest export gains now will come not from another incentive scheme, but from unlocking idle capacity and lowering average production costs. In fact, the government has already moved in this direction by allowing eligible SEZ manufacturing units, for one year from 1 April 2026 to 31 March 2027, to sell part of their output into the domestic market at concessional duty, subject to value-addition and export-linked conditions.

My argument is that this should not remain a one-time relief window. It should be institutionalised into a stable SEZ 2.0 framework, because access to the domestic market helps firms achieve economies of scale, smooth demand shocks and remain export-competitive when global demand is weak. Alongside that, I would add a 12-month green channel for compliant MSME exporters: automated, risk-based customs clearance with near-zero physical intervention except where red flags emerge. This is feasible because Indian Customs already has the AEO architecture and since January 2025 it has rolled out automated out-of-charge for trusted AEO T2 and T3 clients.

So the core idea is simple: Unlock scale in SEZs and unlock speed at the border. That combination would deliver faster export growth than any headline tariff change.

MS: With war-risk premiums on Gulf routes jumping from ~0.25% to as high as 5–10% of vessel value and insurance costs rising 15–20%. How should Indian exporters realistically absorb or hedge these shocks without losing price competitiveness globally?

Dr. Samridhi: Indian exporters cannot realistically absorb the entire shock on their own balance sheet when war-risk premia jump from low basis points to multi-percentage points of vessel value and freight plus insurance are repriced almost voyage by voyage. Reuters reporting in March showed hull war premiums moving from about 0.25% to roughly 3% in some cases, while insurers and brokers said rates were changing daily and cover terms were tightening sharply. So the right response is a layered hedging strategy, not blanket cost absorption.

First, exporters should segment products by margin and urgency. High-value, time-sensitive exports can bear higher insurance and freight costs; low-margin bulk products cannot and those contracts should be repriced, deferred, rerouted, or shifted to alternate markets. In other words, firms should protect contribution margins, not just volumes.

Second, firms should change contract structure wherever bargaining power allows. Moving selectively from CIF to FOB, or inserting war-risk and extraordinary-freight adjustment clauses into contracts, shifts part of the logistics volatility to the buyer instead of forcing Indian exporters to silently absorb it. That is especially important when shipping lines are adding war-risk and emergency conflict surcharges on top of normal freight.

Third, exporters should insure smarter. The government’s RELIEF scheme already offers up to 100% enhanced risk cover for some ECGC-insured shipments, 95% cover for upcoming consignments and up to 50% reimbursement of extraordinary freight and insurance costs for eligible non-ECGC-insured MSMEs. Exporters should use that window aggressively.

Finally, to preserve price competitiveness, firms must offset external shocks through internal efficiency: consolidate shipments, negotiate annual insurance facilities instead of spot cover where possible, shorten inland dwell time and shift more domestic movement to cheaper rail or coastal modes so that savings at home partly fund risk abroad. So the realistic answer is: do not absorb everything; share it, insure it, reroute it and offset it. That is the only sustainable way to remain competitive in a war-risk trade environment.

MS: India has invested heavily in logistics. In your experience and expertise, what is still structurally broken at the ground level? How can logistics costs realistically be brought down from ~13–14% of GDP to global Benchmarks?

Dr. Samridhi: The first correction I would make is conceptual: the latest NCAER–DPIIT assessment does not place India’s logistics cost at 13–14% of GDP; it estimates it at 7.97% of GDP and 9.09% of non-services output for 2023–24. So the issue is less about chasing a misleading headline number and more about fixing the structural inefficiencies within the system.

At the ground level, three things remain broken.

Modal imbalance: Road still carries too much freight despite being costlier on average than rail and coastal shipping. NCAER estimates average costs at Rs. 3.78 per tonne-km for road, versus Rs. 1.96 for rail and Rs. 1.80 for coastal shipping.

Poor first- and last-mile integration means multimodal efficiency is not fully realised, even though the report shows rail-based multimodal movement becomes economical beyond roughly 600 km.

Fragmentation hurts small firms disproportionately: logistics costs are estimated at 16.9% of output for small firms, versus 7.6% for large firms, which points to scale disadvantages, weak warehousing access and limited digital visibility.

So, realistically, costs will fall not through one grand reform, but through modal shift, better multimodal connectivity, digital coordination through platforms like ULIP and scale-enabling ecosystems for MSMEs. That is how India moves closer to global benchmarks in a credible way.

MS: If you had to fix just one bottleneck in India’s trade facilitation system, what would it be and how?

Dr. Samridhi: If I had to fix just one bottleneck in India’s trade facilitation system, it would be inter-departmental friction. In practice, the bigger problem is not that India lacks platforms or policy intent; it is that multiple ministries and regulatory agencies still operate in silos, so the exporter faces one state, but the state behaves like many different offices. A change in Commerce does not always translate smoothly into Customs, port operations, shipping procedures, or partner-agency clearances.

So my answer would be institutional: India needs an empowered trade facilitation war room—or a Trade Czar-like mechanism—sitting above Commerce, Finance/Customs, Shipping, Railways and the main partner government agencies, with authority to resolve operational conflicts in real time.

The practical instrument for that is a mandatory digital single window. India is already moving in this direction. SWIFT 2.0 is designed as a single touch point for EXIM clearances, with a unified dashboard, digital NOCs, real-time alerts, online fee payment and phased onboarding of more than 60 partner government agencies. At the same time, ULIP connects 43 systems across 11 ministries through APIs to improve visibility and coordination across logistics flows. But the key next step is this: one filing should be legally sufficient, with time-bound approvals and deemed clearance if an agency does not respond. That would cut duplication, reduce turnaround time and lower trade costs far more than another incremental reform.

MS: Is supply chain diversification truly making India stronger, or just more fragmented?

Dr. Samridhi: I would say supply-chain diversification is making India structurally stronger, but only if it raises domestic value added rather than turning India into a mere transit point between rival blocs. That is the key theoretical distinction: in a fragmenting world, countries can benefit either through trade reallocation, where production and value addition actually shift into the domestic economy, or through simple trade rerouting, which creates volume without durable industrial gains. That is why I do not see the current moment as pure fragmentation. It is better understood as selective re-clustering. UNCTAD notes that firms are no longer consolidating supply chains around one geography; they are diversifying across multiple regions to reduce risk, even though that increases complexity. It also observes that countries such as India have deepened trade ties with specific partners as global dependence patterns shift.

For India, this creates an opportunity to become what recent research calls a connector economy: a country that intermediates trade and investment across geopolitical divides because it has manufacturing capability, market access and relative strategic flexibility. That is where strategic autonomy matters. India has strengthened trusted commercial corridors with partners such as the UAE under CEPA, while still preserving flexibility in energy sourcing, including continued, though fluctuating, Russian crude imports amid shifting geopolitical pressures.

So yes, diversification can make India stronger, but only if it translates into capability, not just complexity. The reward is resilience and bargaining power; the risk is fragmentation without upgrading.

MS: What is one reform India is delaying that could significantly boost trade competitiveness?

Dr. Samridhi: If I had to name one delayed reform, it would be factor-market reform inside industrial clusters, specifically, plug-and-play industrial land combined with predictable labour flexibility at the state level. India has done a lot on incentives and infrastructure, but firms still struggle to scale from “factory” to globally competitive cluster when land aggregation, approvals and workforce rules remain uneven across states.

Why does this matter for trade competitiveness? Because in export manufacturing, the binding constraint is often not tariffs or even logistics; it is the cost and speed of setting up production at scale. The government itself has recognised this by first announcing investment-ready plug-and-play parks in the Budget and then approving BHAVYA in March 2026 to develop 100 plug-and-play industrial parks with pre-approved land, ready infrastructure and integrated services. The fact that such a scheme is needed tells you the bottleneck has been real.

The labour side is similar. India’s labour codes have moved forward, but because labour is a concurrent subject, implementation depends on both the Centre and states, which means firms still face uncertainty in actual operating conditions across locations. So the real reform is not just “more parks” or “more labour reform” in isolation. It is a nationally interoperable cluster regime: pre-cleared land, common utilities, worker housing, single-window approvals and uniform state-level operating rules. That is what would lower setup time, raise scale and materially improve India’s export competitiveness.

MS: Looking ahead, what would a 'resilient Indian trade ecosystem' actually look like in action?

Dr. Samridhi: A resilient Indian trade ecosystem would not look like self-sufficiency and it would not look like opportunistic fragmentation either; it would look like an adaptive, shock-absorbing network in which firms can switch markets, modes, suppliers, finance and routes without collapsing margins or delivery schedules. That is exactly the direction in which global trade is moving: UNCTAD notes that firms are diversifying supply chains across regions rather than consolidating them, while research on “connector economies” shows that countries with strategic flexibility, industrial capability and market access gain relevance in a fragmenting world. In action, that means five things.

First, India would have depth at home: stronger component ecosystems, industrial clusters and plug-and-play parks so that exports are based on domestic value addition, not just rerouting. The government’s recent push through BHAVYA and the broader industrial corridor architecture points in that direction.

Second, it would have redundancy abroad: multiple export markets, trusted trade corridors like the UAE CEPA and alternate transport corridors rather than dependence on a few chokepoints.

Third, it would be digitally coordinated: one filing, one data trail, one real-time logistics view across agencies. India has the building blocks already in SWIFT 2.0 and ULIP, but resilience means these systems actually work as an integrated operating layer for trade.

Fourth, it would be financially insured: wider use of export credit cover, faster trade finance and emergency instruments like RELIEF when geopolitical shocks hit freight and insurance.

And finally, it would be governed with strategic autonomy: trusted value chains with the West, flexible energy and commodity sourcing with the East and enough policy credibility that India becomes the partner global firms rely on when the world becomes less predictable. In short, resilience means India is not the cheapest node in the system, but the most dependable one under stress.

About Dr. Samridhi Bimal

Dr. Samridhi Bimal is a trade economist and policy researcher with over 14 years of experience in international trade, trade facilitation, border management, regional connectivity and cross-border infrastructure. She holds a Ph.D. in Economics from the Centre for International Trade and Development, Jawaharlal Nehru University. She has worked extensively on policy-oriented research across South Asia, including India, Bangladesh, Bhutan, Nepal, Myanmar and Pakistan. Her work has focused on trade facilitation, customs modernisation, land and sea ports, transit systems, regional economic integration, gender-responsive trade facilitation, informal trade and investment climate assessment. She has contributed to a range of research and knowledge products for governments, multilateral institutions and development partners, with a strong emphasis on practical and evidence-based approaches to improving trade and connectivity outcomes.

About the Interviewer

Mahima Sharma is an Independent Senior Journalist based in Delhi NCR with a career spanning TV, Print, and Online Journalism since 2005. She has played key roles at several media houses including roles at CNN-News18, ANI, Voice of India, and Hindustan Times.

Founder & Editor of The Think Pot, she is also a recipient of the REX Karmaveer Chakra (Gold & Silver) by iCONGO in association with the United Nations. Since March 2022, she has served as an Entrepreneurship Education Mentor at Women Will, a Google-backed program in collaboration with SHEROES. Mahima can be reached at media@indiastat.com

Disclaimer : This interview is the personal opinion of the interviewed protagonist and not those of the organisation he/she works for. The facts and opinions appearing in the answers do not reflect the views of Indiastat or that of the interviewer. Indiastat does not hold any responsibility or liability for the same.