Mumbai: Recurring disruptions in West Asia are prompting multinational companies to shift inventory to India as they move away from relying on a single distribution hub in the Gulf, reshaping regional supply chains, a senior executive at DP World said.
Automotive and pharmaceutical companies are among those setting up satellite distribution hubs at DP World’s free trade warehousing zones (FTWZs) in India alongside Dubai’s Jebel Ali Free Zone to ensure supplies are not disrupted during geopolitical crises, said Ranjit Ray, chief operating officer -logistics, Subcontinent, Central Asia, Levant and Egypt, on Wednesday.
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The shift was triggered by the recent conflict in West Asia, which temporarily disrupted trade flows through the region and reinforced concerns among manufacturers over concentrating regional inventories at a single location.
Speaking at Nhava Sheva Business Park in Navi Mumbai, developed by DP World, Ray said the conflict has accelerated a shift that was already underway, with companies moving away from “just-in-time” inventory models to building buffer stocks at multiple locations.
Instead of depending on a single regional hub, businesses now want a primary distribution centre supported by one or two satellite hubs so supplies can continue even if geopolitical tensions disrupt trade routes or port operations.
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Around 10-12 multinational customers, including six to seven global automotive spare parts suppliers, have shifted part of their inventories to DP World’s facilities in Mumbai and Chennai over the past few months, he said. Pharmaceutical, chemical, industrial and agriculture companies have also moved cargo.
Earlier, companies typically served Africa, the Middle East and Central Asia from a single regional hub in Dubai. Now they are splitting inventories across two locations so supplies can continue even if trade routes or ports are disrupted. “The mother hub will remain, but customers now want a satellite hub as well,” Ray said, adding that companies have indicated the move is permanent.
