Building Resilient Supply Chains in an Era of Geopolitical Uncertainty

by Tushar Bhaskar, President, Rubix Data Sciences

In May 2026, a mid-sized Indian EPC contractor executing a renewable energy project in Rajasthan was hit with a 23% increase in the cost of imported steel and copper components. It was triggered by forces far removed from the project site: disruptions in West Asian shipping corridors and US tariff measures. The contractor had budgeted for commodity risk, but not for the combined impact of conflict-driven logistics disruption and shifting trade policy.

Events that once appeared exceptional are influencing day-to-day supply chain decisions. The GEP Global Supply Chain Volatility Index, which had signalled underutilised capacity in November 2025, jumped to 1.64 in April 2026, its highest reading since the pandemic-era disruptions of late 2022, as the West Asia conflict triggered inflation concerns, shortages, and the fastest pace of safety stockpiling by manufacturers in three years. By May, that pressure had persisted for a third consecutive month, with stockpiling, shortages, and transportation costs all elevated simultaneously, a pattern GEP itself described as rare.

The timing is particularly significant for India. In this VUCA environment, the country is pursuing one of the most ambitious infrastructure and manufacturing expansions in its history: a ₹111 lakh crore commitment towards the National Infrastructure Pipeline and a ₹1.97 lakh crore outlay for the Production Linked Incentive scheme spanning 14 sectors. At the same time, global companies seeking to diversify production footprints are directing new sourcing and manufacturing opportunities towards India. Together, these developments are creating a significant opportunity for the Indian industry to deepen its role in global supply chains.

That opportunity, however, is accompanied by growing exposure to global disruptions. India’s oil import dependence climbed to more than 85% of consumption in early 2026, even as it has become the world’s largest source of incremental oil demand. However, the strategic petroleum reserve provides cover for only about 18 days of consumption, significantly below the International Energy Agency’s benchmark of 90 days. This leaves relatively little buffer against disruptions affecting key West Asian supply routes.

For EPC project owners and contractors who lock in costs at the bid stage and deliver projects over 24 to 36 months, volatility of this kind can fundamentally alter project economics. The issue extends beyond individual projects and reflects a broader mismatch between the way supply chains were designed and the realities of today’s operating environment.

India’s supply chains were built around efficiency, prioritising the lowest cost, shortest lead times, and lean inventories. But trade policy shifts, geopolitical tensions, and the reconfiguration of global production networks are forcing businesses to balance efficiency with resilience. While many companies have diversified sourcing geographies, the risk is not automatically reduced if new dependencies and concentration points emerge elsewhere in the supply chain.

Four Fault Lines That Demand Attention

• Geopolitical and Trade Policy Risk has moved from the periphery of supply chain planning to the centre of it. Tariff regimes are evolving rapidly, and in some cases, products are being assessed on their country of manufacture as well as on their country of design. For procurement teams managing globally distributed supplier networks, this introduces an additional layer of complexity, making it increasingly difficult to rely on cost assumptions embedded in long-term contracts and investment plans.

• Critical Mineral and Raw Material Dependency is becoming more pronounced as infrastructure and energy-transition projects become more technology-intensive. India’s renewable energy capacity addition of 48.4 GW in 2025 accelerated demand for batteries, power electronics, and energy storage systems. Many of these technologies depend on supply chains built around rare earth elements and other critical minerals. China currently accounts for approximately 60% of global rare earth mining and nearly 90% of processing and refining capacity, giving it a dominant position across several strategic industrial value chains. Export restrictions introduced in 2024 and 2025 have increased pressure on renewable energy, electronics, and advanced manufacturing supply chains worldwide. This is a risk that needs to be addressed through procurement decisions and long-term diversification and strategic planning.

• Counterparty and Financial Risk remains one of the most underestimated sources of supply chain disruption. Operational disruption may be the visible outcome, but delivery delays, fulfilment gaps, deteriorating payment behaviour, or a gradual weakening of operational performance often show up much earlier. Supply chain diversification can further complicate matters. As businesses onboard suppliers in new markets and geographies, they often encounter counterparties whose financial strength, ownership structures, compliance history, and operational resilience are less familiar than those of long-established partners. At Rubix, our monitoring of over 1,500 corporates, banks, and fintechs using more than 120 structured and unstructured data sources consistently shows that some of the earliest indicators of stress emerge through GST filing irregularities, PF payment delays, and adverse litigation records, often weeks or months before a formal default. Yet, many organisations continue to assess counterparty health primarily during onboarding and revisit it only after a problem has surfaced.

• Regulatory and Compliance Risk adds a fourth dimension that is becoming very complex. SEBI’s sustainability reporting circulars, the EU’s Corporate Sustainability Due Diligence Directive with its 5% revenue penalty exposure, and India’s Business Responsibility and Sustainability Reporting requirements are extending accountability beyond the enterprise itself and deeper into supply chains through ESG disclosures. Under emerging frameworks, non-compliance by suppliers can expose project owners and anchor enterprises to legal, financial, and operational consequences, even when the underlying issue originates elsewhere in the value chain.

Why Traditional Risk Management is Inadequate

The conventional approach to supply chain risk relies on three instruments: financial credit checks at vendor onboarding, periodic audits, and contractual indemnification clauses. These share a common limitation of being inherently backwards-looking. Credit assessments rely on historical financial information, audits provide only a point-in-time view of risk, and contractual protections offer limited practical value when a critical supplier is already unable to perform.

This does not work for today’s risk environment, where multiple risk factors have converged. A regional conflict can increase freight costs, extend shipment timelines, delay invoicing, tighten supplier liquidity, and ultimately increase default risk across a network of counterparties. Viewing these risks through separate operational, financial, and compliance lenses often obscures the way they reinforce one another.

The defining characteristic of the current environment is speed. A regional conflict, tariff announcement, export restriction, or regulatory change can now move through global supply chains in a matter of days. Quarterly review cycles fall out of sync with such an environment in which material conditions can shift week by week.

The Intelligence-Led Approach to Resilience

Supply chain resilience is highly dependent on the quality, speed, and continuity of risk intelligence available to decision-makers. At Rubix, we define resilience through three capabilities.

• Near real-time counterparty monitoring continuously tracks the financial health, regulatory compliance, and adverse event signals of material suppliers and buyers from onboarding through the duration of the commercial relationship.
• Nth-tier visibility extends risk assessment beyond immediate counterparties and into the Tier-2 and Tier-3 ecosystem that many organisations struggle to observe. Single-source dependencies often exist several layers below direct supplier relationships, where visibility is limited but disruption can have far-reaching consequences.
• Early warning systems use predictive indicators such as payment behaviour changes, litigation filings, regulatory violations, and adverse news to identify stressed counterparties 60 to 90 days before failure, creating a window for intervention while corrective action is still possible.

Organisations adopting these capabilities find that supply chain resilience and financial resilience are becoming closely intertwined. The ability to monitor counterparties continuously, anticipate emerging stress, preserve liquidity, and respond before disruption affects operations is now a source of competitive advantage.

Building for the Decade Ahead

India’s infrastructure and manufacturing ambitions are achievable, but they will be supported by supply chains operating in a far more complex geopolitical environment than the one that existed a decade ago. Conflicts, trade disputes, regulatory shifts, and resource dependencies may differ in form, but their effects are converging through the same supply chain networks.

When disruption can originate from geopolitical conflict, financial stress, regulatory action, or upstream supplier concentration, visibility is a strategic asset. Organisations that understand their counterparty ecosystem in greater depth are better positioned to absorb shocks, preserve continuity, and protect margins when conditions change unexpectedly, making resilience a core capability that influences growth, competitiveness, and long-term execution.