Challenges of Sourcing from India in 2025 And How to Solve Them

India is one of the world’s most promising sourcing destinations in 2025, offering competitive labor costs, a large skilled workforce, and a rapidly growing export economy. Yet, while the benefits are compelling, sourcing from India also presents unique challenges that global buyers must navigate carefully. From supplier fragmentation to infrastructure gaps and quality variability, success in India often depends on having the right local support.

At I2W, we have an experienced team on the ground and an office in Pune — one of India’s key manufacturing hubs — helping international clients manage their sourcing operations seamlessly. In this article, we outline the major challenges of sourcing from India and offer practical, proven solutions.

1. Fragmented Supplier Base: Addressing India Sourcing Challenges

India’s industrial landscape is largely dominated by small and medium enterprises (SMEs). While this creates flexibility and cost advantages, it also means buyers face a fragmented supplier base with inconsistent capabilities. Many suppliers are highly skilled and capable of producing quality goods, but not all are export-ready. Challenges such as lack of export licenses, limited English proficiency, or unfamiliarity with international packaging and compliance standards can delay or derail sourcing projects.

Solution: Conduct thorough due diligence before selecting suppliers. Use third-party verification and supplier audits to confirm legitimacy and production capacity. Platforms like IndiaMART and TradeIndia can be helpful for initial discovery, but in-person factory visits and local sourcing agents ensure better results. At I2W, we provide on-the-ground assessments that go beyond digital vetting, including interviews and hands-on evaluation of facilities.

2. Quality Inconsistency: Managing Supplier Issues in India

Varying levels of technology adoption and quality standards across suppliers can lead to inconsistencies in finished goods. This is especially relevant in sectors like textiles, furniture, handicrafts, and small tools. In some cases, local suppliers may not fully understand international tolerances or technical drawings unless clearly explained.

Solution: Set clear product specifications and quality benchmarks from the outset. Avoid assumptions,  what may seem like a standard requirement in the West might need explicit clarification in India. Implement multi-stage quality inspections: pre-production, in-line, and pre-shipment. Services like ours at I2W include tailored inspection plans, sample approvals, and production monitoring to reduce variability.

3. Logistics and Infrastructure Challenges: Solving Sourcing Risks in India

Despite major infrastructure upgrades (such as the Dedicated Freight Corridors and port expansions), some regions still face logistical delays due to road congestion, bureaucratic customs processes, and inadequate warehousing facilities. Smaller suppliers may also lack the logistics experience to manage timely deliveries and export documentation.

Solution: Source from regions with stronger logistics connectivity (e.g., Pune, Chennai, Ahmedabad). Work with sourcing agents or 3PLs familiar with local regulations. Planning buffers into your lead time and utilizing bonded warehouses or export zones can significantly reduce delays. I2W’s in-country logistics partners help clients manage shipments efficiently, including handling export paperwork and coordinating with freight forwarders.

4. Intellectual Property Concerns

While India has improved IP laws and enforcement, protection can still be inconsistent,  especially when working with unregistered or small-scale suppliers. While many suppliers are ethical, risks remain for proprietary designs, tools, and packaging being reused or sold elsewhere.

Solution: Register trademarks, designs, and patents in India through the Controller General of Patents, Designs & Trademarks. Avoid sharing proprietary designs or formulas with unverified suppliers. Ensure NDAs are signed before development begins. Working with sourcing partners like I2W who understand local legal frameworks and have long-term supplier relationships can mitigate this risk.

5. Communication and Cultural Gaps

While most urban suppliers speak English, communication gaps can still arise, particularly with smaller vendors. Cultural nuances also play a role. For instance, the concept of IST — Indian Stretchable Time — reflects a flexible approach to deadlines that may not align with Western expectations. Additionally, traditional customs may influence how and when work gets done, especially around religious holidays and festivals.

Solution: Maintain regular communication, preferably via video calls and shared documentation. Set clear, documented deadlines and expectations with reminders and regular follow-ups. It’s also helpful to understand regional holidays and working customs, as well as the importance of hierarchy in Indian business culture. A local liaison like I2W can bridge these differences by reinforcing timelines, translating expectations, and proactively managing supplier communication.

6. Supplier Reliability and Overcommitment

Indian suppliers are often eager to win new business and may overpromise on delivery capacity or lead times. This is particularly common among SMEs that lack production planning systems.

Solution: Start with small trial orders to test delivery timelines and quality. Conduct capacity audits before scaling up. Get clarity on how many other clients the supplier is managing concurrently. Having an on-the-ground team enables quick supplier assessments, intervention when needed, and escalation before things go off track.

7. Payment and Legal Disputes

Disputes over payments, terms, and delivery can arise when contracts are not clearly defined. In some cases, refund requests or quality claims may not be honored easily, especially if the supplier is not export-savvy.

Solution: Always use formal purchase orders and contracts outlining deliverables, penalties, and payment schedules. Consider using irrevocable Letters of Credit for large transactions. Retain evidence of correspondence and contracts. In case of disputes, having a registered presence in India or a partner like I2W can provide faster resolution and enforceability.

8. Time Zone and Follow-Up Delays

The time zone difference can be beneficial, but also means that communication may lag unless proactively managed. Delays in email responses or unclear updates can hold up production.

Solution: Establish a routine check-in schedule. Use collaboration tools like WhatsApp, Slack, or shared project dashboards. Set milestones and require photographic or video evidence of progress. I2W’s local team maintains daily oversight and acts as your real-time eyes and ears.

9. Misalignment of Expectations

Some suppliers might not fully understand the aesthetic or functional standards expected by international brands. This can result in products that technically meet spec, but fall short in finish or packaging.

Solution: Use visual guides, samples, and packaging mock-ups. Conduct a pilot production run to gather feedback before full-scale production. Our I2W team works closely with both buyer and supplier to align not just on specs, but also brand expectations.

Final Thoughts: Local Support is Key

India offers tremendous sourcing potential, but to unlock its full benefits, companies must navigate a unique set of challenges. With over 20 years of sourcing experience and a full-service team based in India, I2W bridges the gap between international buyers and local suppliers. Our presence in Pune, a manufacturing and logistics hub gives us unique access to supplier networks, faster lead time control, and critical real-time updates.

By understanding local customs, setting clear expectations, and having reliable on-the-ground support, businesses can achieve sourcing success in India with greater confidence.

Ready to build a successful supply chain in India? Contact our team at I2W and let’s explore how we can make your India sourcing strategy a success.