As China tightens export controls on rare earth magnets, the shockwaves are being felt across global logistics and supply chain management, particularly in the automotive, defense, and consumer electronics sectors. For India’s electric vehicle (EV) ecosystem, the crisis exposes a critical weakness overdependence on Chinese supply chains. Despite possessing the third-largest reserves of rare earth elements, India has yet to build a self-reliant logistics chain management infrastructure to extract, refine, and manufacture these vital components. Meanwhile, China dominates the market by mining 61% and refining 91% of the global rare earth supply, leaving countries like India vulnerable to supply shocks. Rare earth magnets are small but vital parts of modern vehicles from ICE vehicles using them in power steering and wipers to EVs relying on them in Permanent Magnet Synchronous Motors. These motors offer high torque, compact design, and energy efficiency essential traits for EVs. This dependency has severe implications for logistics and supply chain trends in India's automobile industry. Real-time logistics planning is being hampered as manufacturing timelines get pushed, with China reportedly rejecting two India-bound shipments.  

In a unique blend of culture, civic engagement, and real-time logistics and supply chain management, students from India’s top institutes including IITs, IIMs, and major public policy schools will head to Puri, Odisha for an intensive on-ground internship during the Jagannath Rath Yatra 2025. But instead of being mere spectators or pilgrims, these students will be part of a Public Systems and Infrastructure Internship, gaining direct exposure to one of India’s largest and most complex cultural events. The initiative is being led by the Puri District Administration to immerse students in real-time logistics planning, crowd management, and civic infrastructure. Over a 10–15 day period, selected students will work on live projects that include sanitation logistics, demand forecasting in logistics, emergency response coordination, logistics chain management, and digital citizen services. They'll contribute to logistics planning software implementation and help manage logistics and distribution operations that handle millions of visitors.  

1. What Is the Shadow Supply Chain? Every company prides itself on a well-oiled supply chain, a carefully orchestrated network of trusted partners, meticulously vetted contracts, and stringent quality controls. Yet, beneath this visible, formal structure often lies a hidden, often perilous, counterpart: the shadow supply chain. This isn't a theoretical concept, it's the untracked, unregulated, and frequently informal segment of a company’s broader supply network, operating entirely outside the purview of official oversight. Imagine an iceberg, with only a fraction visible above the surface, the shadow supply chain represents the vast, submerged mass, silently influencing, and often jeopardizing, the entire enterprise. At its core, the shadow supply chain encompasses a range of players that exist beyond the reach of formal procurement systems. This includes unauthorized suppliers brought in during a rush without proper vetting, subcontracted vendors operating tiers below direct relationships and often unknown to the primary client, and even third-tier providers whose role might only become apparent when a problem arises. These entities, while critical to the actual delivery of goods and services, function without the benefit of official contracts, bypass standard compliance protocols, and evade established quality controls. They are the unofficial backbone, making things happen in the informal economy, but simultaneously creating significant vulnerabilities. Unlike the formal supply chain, where every transaction, every partner, and every risk assessment is meticulously documented and managed through structured systems, the shadow supply chain thrives on minimal oversight. Information is scarce, relationships are often informal, and data on performance, ethics, or even existence is virtually non-existent. This glaring lack of visibility isn't just an administrative inconvenience; it’s a gaping hole in a company’s risk management strategy. It’s where unforeseen disruptions, ethical breaches, and quality failures are most likely to originate, creating a domino effect that can cripple operations, damage reputations, and trigger severe legal repercussions, all from a source you didn’t even know existed. Understanding and addressing this invisible web is no longer optional; it’s an urgent imperative for any organization aiming for true resilience and accountability in today's complex global market. Example: In 2021, Volkswagen discovered that a Tier-3 supplier linked to one of its Tier-1 vendors was using unauthorized labour practices in China, causing major reputational damage. Volkswagen was unaware of this supplier’s existence until it hit media headlines. 2. Why Does the Shadow Supply Chain Exist? Several drivers lead to the creation and persistence of shadow supply chains: Cost Pressure & Outsourcing Companies demand cheaper, faster solutions, leading Tier-1 or Tier-2 suppliers to subcontract parts of the process to unregistered or informal providers. Lack of Visibility Beyond Tier-1 According to a 2023 McKinsey report, only 37% of companies have visibility into Tier-2 suppliers, and just 15% track Tier-3. This makes it easy for shadow vendors to enter unnoticed. Urgency in Fulfillment In high-pressure environments like apparel fast fashion or semiconductor procurement vendors may bypass formal processes to meet aggressive deadlines. Fragmented Supply Chains With globalization, supply chains span multiple geographies. A 2024 WEF report noted that over 60% of supply chains in electronics and automotive sectors now involve more than five countries, increasing the chance of informal linkages. 3. Where Does the Shadow Supply Chain Pose the Most Risk? Shadow supply chains are especially common and risky in certain sectors and regions: Sectors Automotive: Highly tiered supplier networks, often with limited traceability. Pharmaceuticals: Use of third-party API suppliers with unclear quality control. Electronics: Informal subcontracting to meet chip shortages. Textiles: Sweatshops and unregistered units in countries like Bangladesh, India, and Vietnam. Geographies South & Southeast Asia (India, Bangladesh, Vietnam) Eastern Europe Latin America These regions often feature informal labour, weak regulatory enforcement, and multi-tier subcontracting models.