What Does Germany's Supply Chain Act (LkSG) Mean for Indian Suppliers?

Published 2026-10-13.

If you sell to a large German company, you have probably received a supplier code of conduct, a questionnaire about labour and environmental practices, or a request to sign a declaration. Most of it traces back to one law: the German Supply Chain Due Diligence Act, known as the LkSG.

In 2025 Germany began loosening that law. This article explains what changed, what did not, and what an Indian supplier should still expect.

What the LkSG requires

The LkSG applies to large companies in Germany. It requires them to run risk management across their supply chains for human rights and certain environmental risks: carry out regular risk analyses, take preventive measures, set up a complaints procedure, and act when they find violations. Suppliers are not directly bound by the law, but their German customers must assess and manage them.

What changed in 2025 and 2026

Reporting removed. In early September 2025 the German cabinet approved an amendment that removes the annual reporting obligation, retroactively. The supervisory authority has already stopped reviewing those reports.
Lighter sanctions. Fines are to apply only to severe violations leading to significant human rights infringements.
Status. The Bundestag held the first reading of the amending bill on 14 January 2026. Check whether it has been finally passed.

What did not change

The core duties stay: risk management, regular risk analyses and preventive measures in supply chains. For a supplier, that means the questionnaires and audits do not go away. What goes away is the German company's annual public report.

What comes next: the EU directive

Germany must also transpose the EU's revised Corporate Sustainability Due Diligence Directive by mid-2028. As revised, it will initially apply only to very large companies, those with 5,000 employees and €1.5 billion in global net turnover. Its duties will eventually replace much of the LkSG for those companies.

What an Indian supplier should do

Keep your answers consistent and documented. German customers still need evidence for their risk analysis: labour practices, health and safety, environmental permits, and where your own inputs come from.
Map your own suppliers. Customers increasingly ask about tier 2 risks, such as cotton, metals or chemicals.
Have environmental data ready. Energy use, emissions, water and waste are now routine parts of German supplier questionnaires, alongside the social questions.
Treat it as a sales asset. A supplier who answers quickly and with evidence is cheaper for a German buyer to keep.

Senseible helps with the environmental side: energy use and emissions built from your bills and invoices, each number linked to its source, ready for a customer questionnaire. For the EU-level picture, read CBAM and CSDDD for Bangladesh garment exporters, which applies the same logic to a neighbouring supplier country.

This is general guidance, not legal advice. Check the final text of the amended LkSG and your customer's requirements.