diff --git a/src/pip/_internal/utils/setuptools_build.py b/src/pip/_internal/utils/setuptools_build.py
index 9d65ceba4ab..1b80c13c728 100644
--- a/src/pip/_internal/utils/setuptools_build.py
+++ b/src/pip/_internal/utils/setuptools_build.py
@@ -1,21 +1,45 @@
 import sys
+import textwrap
 from typing import List, Optional, Sequence
 
 # Shim to wrap setup.py invocation with setuptools
-#
-# We set sys.argv[0] to the path to the underlying setup.py file so
-# setuptools / distutils don't take the path to the setup.py to be "-c" when
-# invoking via the shim.  This avoids e.g. the following manifest_maker
-# warning: "warning: manifest_maker: standard file '-c' not found".
-_SETUPTOOLS_SHIM = (
-    "import io, os, sys, setuptools, tokenize; sys.argv[0] = {0!r}; __file__={0!r};"
-    "f = getattr(tokenize, 'open', open)(__file__) "
-    "if os.path.exists(__file__) "
-    "else io.StringIO('from setuptools import setup; setup()');"
-    "code = f.read().replace('\\r\\n', '\\n');"
-    "f.close();"
-    "exec(compile(code, __file__, 'exec'))"
-)
+_SETUPTOOLS_SHIM = textwrap.dedent(
+    """
+    exec(compile('''
+    # This is <pip-setuptools-shim> -- a shim that pip uses to run setup.py
+    #
+    # - It imports setuptools before invoking setup.py, to enable projects that directly
+    #   import from `distutils.core` to work with newer packaging standards.
+    # - Provides a clearer error message when setuptools is not installed.
+    # - It sets `sys.argv[0]` to the underlying `setup.py`, when invoking `setup.py` so
+    #   setuptools doesn't think the script is `-c`. This avoids the following warning:
+    #     manifest_maker: standard file '-c' not found".
+    # - It generates a shim setup.py, for handling setup.cfg-only projects.
+    import os, sys, tokenize
+
+    try:
+        import setuptools
+    except ImportError as error:
+        raise RuntimeError(
+            "setuptools is not available in the build environment, but is required "
+            "to use setup.py-based projects with pip."
+        ) from error
+
+    __file__ = {!r}
+    sys.argv[0] = __file__
+
+    if os.path.exists(__file__):
+        filename = __file__
+        with tokenize.open(__file__) as f:
+            setup_py_code = f.read()
+    else:
+        filename = "<auto-generated setuptools caller>"
+        setup_py_code = "from setuptools import setup; setup()"
+
+    exec(compile(setup_py_code, filename, "exec"))
+    ''', "<pip-setuptools-shim>", "exec"))
+    """
+).rstrip()
 
 
 def make_setuptools_shim_args(
diff --git a/tests/unit/test_utils.py b/tests/unit/test_utils.py
index c142c9e9b5e..3d29b3d4201 100644
--- a/tests/unit/test_utils.py
+++ b/tests/unit/test_utils.py
@@ -943,11 +943,14 @@ def test_make_setuptools_shim_args() -> None:
     )
 
     assert args[1:3] == ["-u", "-c"]
-    # Spot-check key aspects of the command string.
-    assert "sys.argv[0] = '/dir/path/setup.py'" in args[3]
-    assert "__file__='/dir/path/setup.py'" in args[3]
     assert args[4:] == ["--some", "--option", "--no-user-cfg"]
 
+    shim = args[3]
+    # Spot-check key aspects of the command string.
+    assert "import setuptools" in shim
+    assert "__file__ = '/dir/path/setup.py'" in args[3]
+    assert "sys.argv[0] = __file__" in args[3]
+
 
 @pytest.mark.parametrize("global_options", [None, [], ["--some", "--option"]])
 def test_make_setuptools_shim_args__global_options(