MNCs shifting inventory to India amid West Asia crisis: DP World Exec
Automotive and pharmaceutical companies are among those setting up satellite distribution centers in Dubai’s Jebel Ali Free Zone as well as DP World’s free trade warehousing zones (FTWZs) in India to ensure supplies are not disrupted during geopolitical crises, said Ranjit Ray, Chief Operating Officer, Subcontinent, Central Asia, Levant and Egypt Logistics, on Wednesday.
This shift was triggered by the recent conflict in West Asia, which temporarily disrupted trade flows in the region and reinforced concerns among producers about the concentration of regional stocks in one place.
Speaking at the Nhava Sheva Business Park in Navi Mumbai, developed by DP World, Ray said the conflict had accelerated the shift already underway, with companies moving away from “just-in-time” inventory models to building buffer stocks at multiple locations.
Instead of being tied to a single regional hub, businesses now want a primary distribution center supported by one or two satellite hubs, so supplies can continue even if geopolitical tensions disrupt trade routes or port operations.
About 10 to 12 multinational customers, including six to seven global automotive spare parts suppliers, have shifted some of their stock to DP World’s facilities in Mumbai and Chennai in the last few months, he said. Pharmaceutical, chemical, industrial and agricultural companies also transported cargo.
Previously, companies typically served Africa, the Middle East and Central Asia from a single regional hub in Dubai. They now split stock into two locations so supplies can continue even if trade routes or ports are disrupted. “The main hub will remain, but customers now want a satellite hub as well,” Ray said, adding that the companies have indicated the move is permanent.
