Tariffs And The Fog Of Uncertainty: How Indian Businesses Are Navigating A Shifting Global Order

(MENAFN- Live Mint) It is not an easy time to head a business in India–whether of local vintage or multinational. As the global economic and business order takes a tumble, with the US hitting friends and foes alike with its trademark tariff weapon, chaos and uncertainty have spread across the global economy. Businesses have taken a hit–not just from immediate tariff impositions but also from negative sentiments around an uncertain business and investment environment.

The US tariffs of 50% on Indian exports particularly hit sectors such as textiles and apparel, and gems and jewellery. Auto components, too, face pressures given their reliance on exports to the US and Europe. Renewable energy firms, meanwhile, are less directly affected by Washington's tariff strikes, but remain deeply dependent on China for technology and inputs. The recent easing of Sino-Indian tensions has offered some reassurance, but nerves remain raw.

To deliberate on these issues and explore both risks and opportunities, Mint convened a leadership roundtable in Delhi with chief executive officer (CEOs) and thought leaders across textiles, renewable energy, mining, electronics, auto components and law. What emerged were not just sectoral stories, but common threads that reveal how Indian businesses are thinking about survival-and growth-in turbulent times.

China: Partner, Competitor, and Risk

Few issues loomed larger in the discussion than China. For the renewable energy industry, the dependence is stark.“China is the biggest part of our supply chain, so anything that happens with China is the biggest risk for us,” said Nikhil Dhingra, CEO of renewable power producer ACME Solar. Even as India expands its domestic manufacturing base, most critical technology is still imported.

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Bharat Saxena, CEO of Inox Clean Energy, a leading green hydrogen and renewables company, pointed out that module dependency has fallen from“more than 100% to about 80%” thanks to Indian investments and tariffs on Chinese imports. But when it comes to wind turbines, battery storage or lithium-ion cells, China still dominates.“CATL is putting up a 500 GW battery plant spread over 68 km. Nobody can even visualize that scale,” he said.“India has to become China plus one-we can't miss the bus while Vietnam, Malaysia and Thailand are moving fast.”

Electronics players echoed this bind.“We are stuck between two devils. You can't wish away China for the supply chain, and you can't wish away America as a consumer,” said Jasbir Singh Gujral, managing director of electronics manufacturer Syrma SGS.

The Quest for Global Champions

Several participants lamented that India, despite its scale, still struggles to produce globally competitive champions.“Eighteen percent of the world's population sits on 3.5% of world GDP. No tiger economy has ever been created without significant participation of women. Nor can India shine without being a large merchandise exporter,” said Pankaj Mohindroo, chairman of industry body India Cellular & Electronics Association (ICEA).

He pointed to electronics as an exception, where exports have surged dramatically. But, he argued, India needs homegrown brands that compete at the very top.“We don't have a single strong global brand beyond perhaps Hero, Bajaj and Mahindra. We need global value chains across sectors, not just small firms feeding the domestic market,” he said.

Mining executives see a similar gap.“We are the world's largest producer of zinc, but we don't have a global brand. We are buying inputs and selling to domestic farmers. Regulatory restrictions keep producers from scaling globally,” said Neeraj Awasthi, country manager, crop nutrients at global mining group AngloAmerican.

Tariffs and the Human Cost

The most visceral stories came from the apparel industry, which employs millions in labour-intensive work.“Several companies, including ours, depend 80-95% on the American market. If no compromise is found, you will see 1 crore people out of jobs in the next 3-4 months,” warned Sudhir Dhingra, chairman and managing director of garment exporter Orient Craft.

He drew comparisons with Bangladesh, where garment exports anchor the economy and provide mass employment to women from disadvantaged backgrounds.“At least 50% of India's people are women, most in smaller towns. Their fate is sealed if labour-intensive sectors are ignored. Technology is good, but half of India will be left behind,” he said.

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The fear of lost jobs and wasted demographic potential also resonated with Mohindroo's point about women in the workforce. Both argued that India cannot build a true growth story while leaving millions underemployed.

Diversifying Beyond America

One common thread was the need to reduce dependence on the US market.“Why are we so hung up on America?” asked Sudhir Dhingra of Orient Craft.“How many of us have gone to South America, Eastern Europe, Russia? This is the opportunity.”

Gujral of Syrma SGS echoed the logic of diversification. Only 5% of his company's revenue comes from the US, he said, compared with 25% from exports overall.“European customers are long-term partners-my first European client from 1992 is still with me. Companies have to derisk geographies and sectors alike,” he said.

Uncertainty as the New Normal

If one word captured the mood, it was uncertainty.“From 2005 when (Thomas) Friedman wrote about the world being flat to now, there is complete uncertainty. World politics today is like Gen Z 'situationships' - you don't know who is with whom, or for how long,” said Shivpriya Nanda, partner at law firm JSA Advocates & Solicitors.

This unpredictability complicates even legal contracts.“During covid, we started looking seriously at force majeure clauses. Now I wonder what kind of clauses we should draft for clients, given cancelled shipments and tariff shocks,” she said.

Auto suppliers face similar unpredictability.“Nobody has 25% margins to absorb tariffs. Eventually the customer has to deal with their government,” said Vivek Vikram Singh, CEO of auto components major Sona Comstar.

Yet he saw upside in chaos:“Uncertainty is like a fog. If you can navigate it, you'll get ahead. Two European competitors have already gone belly up. There is opportunity for Indian firms with strong balance sheets.”

Building Resilience

Yet, not all leaders see the outlook as entirely bleak. Mohindroo of ICEA argued that the disruption may prove temporary.“I foresee that our tariffs will be around 15% in the next two-three months before Christmas,” he said, urging Indian companies to stay engaged with the $3.5 trillion US import market.

At the same time, Mohindroo emphasized that India must also clean up its sectors, attract investment, and learn to sleep with the enemy-as China did, building itself with technology and capital from rivals.

Or, as Singh of Sona Comstar suggested, fog is not just a threat but a test:“If you sit waiting for the fog to clear, you'll be where you started-sometimes you might be left behind. If you can feel your way through, you will get there faster.”

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