What is the EU's supply chain due diligence law (CSDDD) and does it affect our India suppliers or subsidiary?

CSDDD applies directly only to large EU companies (and large non-EU companies with significant EU turnover) meeting specified size thresholds, but its due diligence obligation extends to their 'chain of activities' — which includes upstream suppliers and, in some cases, downstream distribution and use. This means an India-based supplier, contract manufacturer, or subsidiary that supplies goods or services into a covered EU company's operations becomes subject to that company's due diligence process, even without any direct legal obligation of its own under the directive.

In practice, this shows up as EU customers or parent companies sending detailed supplier questionnaires on labor practices, environmental compliance, and human rights safeguards, requiring contractual compliance commitments as a condition of continued business, and in some cases conducting or commissioning independent audits of India operations. Indian suppliers and subsidiaries that get ahead of this by proactively documenting labor and environmental practices, rather than reacting to each individual EU customer's questionnaire separately, are better positioned to retain and win EU-linked business as these requirements become more standard across supply chains.