by Gurpreet Singh Kohli, Head - Procurement, Embassy Developments
Procurement has evolved from being a back-end support function to a pivotal driver of business value. In today’s fast-paced digital setup, it requires businesses to navigate growing supplier networks, contain risk, and stay agile in an increasingly competitive and unpredictable landscape. Traditionally, procurement processes in India were time-consuming, manual, and highly fragmented. But that reality is rapidly changing.
India’s procurement landscape is undergoing a transformation, propelled by government initiatives, widespread digitisation, and most critically, the integration of Artificial Intelligence (AI). This combination is modernising procurement, redefining it, and enabling organisations to bridge the gap between operational efficiency and strategic impact.
According to recent industry reports, global investment in digital supply chain technologies is expected to surpass $19 billion by 2025, signalling a growing push towards automation and data intelligence in procurement operations. Simultaneously, the global shift towards China-plus-one sourcing has positioned India as a strategic alternative – with its expanding consumer base, policy stability, and technology-led infrastructure development creating the right conditions for a global procurement revolution.
India emerging as a global hotspot in procurement
Over the past decade, India has steadily moved up the global procurement value chain, evolving from a cost-driven market to a smart, strategic sourcing destination. Several visionary government initiatives have played a critical role in catalysing this evolution:
Make in India (2014): Sparked the development of robust local supply ecosystems, reducing dependency on imports and encouraging global companies to source locally.
Skill India Mission & PMKVY: Equipped millions of workers with job-ready skills in manufacturing, logistics, and quality control – core pillars of efficient procurement.
PLI Scheme (Production Linked Incentives): Focused on 14 key sectors, it has driven local production, encouraged material innovation, and fostered MSME-level vendor development.
Digital India & Government e-Marketplace (GeM): Platforms such as GeM have revolutionised public procurement by introducing transparency, inclusivity, and digital accessibility for even the smallest enterprises.
Infrastructure Initiatives (Gati Shakti, National Logistics Policy): Improved supply chain efficiencies by reducing logistics costs and enhancing multi-modal connectivity – critical for procurement professionals.
Together, these interventions have created the foundations for a scalable, intelligent, and transparent procurement ecosystem.
AI across the value chain
Building on this momentum, technology, especially AI, is redefining how procurement operates day-to-day.
AI liberates procurement teams from tedious manual work. Tasks such as vendor onboarding, compliance monitoring, contract renewals, and work order approvals are now automated using AI-powered workflows. Today, procurement is as much about insight as it is about execution. AI's ability to analyse historical data, market trends, and supplier performance means businesses can forecast price fluctuations using predictive analytics.
AI-powered platforms also enhance cross-functional collaboration, connecting procurement to finance, legal, and operations seamlessly. These shared systems break silos, enabling greater transparency across all procurement stakeholders.
Finally, with machine learning algorithms, organisations can continuously monitor vendor performance (delivery, quality, cost) and create dynamic supplier scorecards.
The Human touch still matters
However, as the old adage goes, procurement is as much an art as it is a science. While AI can handle many aspects of procurement, certain tasks require the nuanced judgement and interpersonal skills that only humans can provide. These include:
Negotiation
Negotiation is a complex process that goes beyond mere numbers and terms. It involves understanding the vendor's perspective, finding common ground, and crafting agreements that benefit both parties. The following human skills and expertise are crucial to procurement:
Empathy and Understanding: Individuals can read emotions and body language, allowing them to gauge the vendor's willingness to compromise and identify underlying concerns.
Creativity: Effective negotiators think outside the box to find innovative solutions that satisfy both parties. This creativity is something AI cannot replicate.
Flexibility: Negotiations often require quick thinking and adaptability to changing circumstances, which people excel at.
Empathy and Understanding: Individuals can read emotions and body language, allowing them to gauge the vendor's willingness to compromise and identify underlying concerns.
Creativity: Effective negotiators think outside the box to find innovative solutions that satisfy both parties. This creativity is something AI cannot replicate.
Flexibility: Negotiations often require quick thinking and adaptability to changing circumstances, which people excel at.
Building relationships
Strong vendor relationships are the backbone of successful procurement. These relationships are built on trust, communication, and mutual respect. The human element becomes critical in these areas:
Trust Building: Trust is earned through consistent, honest interactions, including face-to-face meetings, phone calls, and personalised communication.
Conflict Resolution: When issues arise, they must be resolved in a way that maintains the relationship. This involves understanding both sides and finding a fair solution.
Long-term Collaboration: Individuals can foster long-term partnerships by understanding the vendor's business goals and aligning them with their own company’s objectives.
Trust Building: Trust is earned through consistent, honest interactions, including face-to-face meetings, phone calls, and personalised communication.
Conflict Resolution: When issues arise, they must be resolved in a way that maintains the relationship. This involves understanding both sides and finding a fair solution.
Long-term Collaboration: Individuals can foster long-term partnerships by understanding the vendor's business goals and aligning them with their own company’s objectives.
Identifying the right vendor
Selecting the right vendors is more than just analysing data. It involves assessing their reputation, reliability, and alignment with company values. This includes:
Reputation Assessment: Individuals can evaluate a vendor’s reputation through industry knowledge, references, and personal experiences.
Reliability Check: Beyond performance metrics, individuals can assess a vendor’s reliability through interactions and past dealings.
Value Alignment: Individuals can determine if a vendor’s values and business practices align with their own company’s ethical standards and long-term goals.
Reputation Assessment: Individuals can evaluate a vendor’s reputation through industry knowledge, references, and personal experiences.
Reliability Check: Beyond performance metrics, individuals can assess a vendor’s reliability through interactions and past dealings.
Value Alignment: Individuals can determine if a vendor’s values and business practices align with their own company’s ethical standards and long-term goals.
The road ahead
The future of procurement lies in the harmonious blend of science and art. While AI handles the data-driven, repetitive tasks, humans bring creativity, empathy, and strategic thinking to the table. Together, this creates a more efficient, effective, and dynamic procurement process. Embracing AI not only enhances operational efficiency but also elevates the importance of human skills – making procurement a truly collaborative and strategic function.
This fusion of machine intelligence and human insight is transforming procurement operations globally, as well as powering India’s rise as a smart sourcing powerhouse. India’s procurement revolution is the result of synergistic forces: visionary policymaking, a skilled workforce, AI adoption, and digital infrastructure. From a production base to a hub of intelligent procurement, India is showing the world how tech-enabled sourcing can unlock new levels of value.
This fusion of machine intelligence and human insight is transforming procurement operations globally, as well as powering India’s rise as a smart sourcing powerhouse. India’s procurement revolution is the result of synergistic forces: visionary policymaking, a skilled workforce, AI adoption, and digital infrastructure. From a production base to a hub of intelligent procurement, India is showing the world how tech-enabled sourcing can unlock new levels of value.
