Anand Mahindra upbeat about India's prospects in volatile world

Time of India

2 days ago

Mahindra group
Chairman,
Anand Mahindra
believes China's present adversarial stance in global trade may create opportunities for India to position itself as a supply chain alternative — 'a long-term goal for Indian business.'
He has made these observations in the Mahindra & Mahindra Integrated Annual Report 2024-25. According to the Chairman, innovation and R&D in India could receive renewed focus while manufacturing could once again take centre stage.
'Restrictions on China and high tariffs for other competing countries could open new markets for Indian goods. The potential exists, but achieving it will require a concerted focus on manufacturing and a palpable increase in private investment,' says Mahindra.
In his view, speed and agility are essential, as countries like the Philippines and Vietnam are already touting themselves as future manufacturing hubs. 'We must act swiftly and strategically to secure our share of the Amrit,' a reference to the nectar of eternal life in Hindu mythology.
'Today's turmoil is another such churning, another such mega-trend. A growing wave of protectionism is challenging decades of liberal trade order, dramatically highlighted by the Trump administration's tariffs,'Anand Mahindra
The great churning
Interestingly, Mahindra's message draws analogies with this well known narrative where the great Samudra Manthan, or churning of the ocean, occurred many thousand years ago to obtain the precious Amrit, the nectar of immortality. According to him, the present state of the world is akin to this massive churn where it is in a state of flux thanks to the ongoing wars and imposition of tariffs by the US.
'If we zoom out and adopt a broader perspective, it becomes clear that over the course of history, the world has undergone many such churnings. Mega trends — forces so powerful they reshape political, economic, and social landscapes — have defined human progress,' says Mahindra.
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From the industrial revolution to globalisation, from the digital age to climate change, he adds, these 'tectonic shifts' have tested resilience, inspired innovation, and compelled businesses to evolve.
'Today's turmoil is another such churning, another such mega-trend. A growing wave of protectionism is challenging decades of liberal trade order, dramatically highlighted by the Trump administration's tariffs,' says Mahindra. These measures are sparking global responses, including retaliatory tariffs, disrupted supply chains, shifting political alliances, and economic groupings.
'Mahindra & Mahindra's core businesses — auto and tractor — form the trunk, while the aerial roots represent new ventures that anchor themselves independently, expanding resilience and reach,'Anand Mahindra
Exit the old global order
'If I were to look for a single sentence that describes the world today, I would quote the American folk singer Bob Dylan and say, 'The times, they are a-changing,' quips Mahindra while making a reference to the old global order — social, political, and economic — which has been 'rudely shaken' while a new one has not quite emerged.
The situation 'remains fluid' though recent US-China tariff talks and strengthened trade ties with the UK suggest a 'pragmatic layer' to US trade policy, combining protectionism with strategic global engagement. However, cautions the Mahindra Chairman, there remains a strong likelihood of significant decoupling between the US and China.
Whatever the outcome, it is apparent that many nations will have to swallow some 'poison'. International trade has already slowed amidst heightened uncertainty and dampened investor confidence.
According to him, industries reliant on global supply chains like electronics and consumer goods will bear the brunt of rising input costs. Countries deeply integrated into global trade networks must 'rethink dependencies' and diversify sourcing.
'Continued government support is vital to power our transition to a manufacturing economy. Renewable energy, defence, and digital infrastructure are becoming sunrise industries in India,'Anand Mahindra
New era of nationalism
Established geopolitical alliances are being realigned, ushering in a new era of economic nationalism. Mahindra says businesses worldwide will adapt by localising operations, reengineering supply chains, and exploring alternate markets.
India, too, will be no exception to the rule and will face its own set of challenges. 'Our large trade deficit, vulnerabilities in certain sectors, increased competition among nations, and uncertainties affecting GDP aspirations are all challenges that must be met,' he elaborates.
Key industries, such as steel and aluminium, could face headwinds, and export volumes may be impacted. The challenge will be to minimise the adverse effects.
'However, focusing solely on mitigation reflects a reactive mindset. Instead, we can proactively view this as an opportunity to enable some Amrit to emerge. What if we seize this challenge as an opportunity to accelerate economic growth? Private enterprise can play a pivotal role in this transformation,' says Mahindra.
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Opportunities for India
In a scenario with so many moving parts, it is difficult to predict outcomes. However, two significant implications of the current manthan, or churning, offer opportunities that India must leverage.
Inspired by the US, countries are likely to adopt a more self-centred approach, raising economic nationalism to unprecedented levels. Even before these shifts, India 'was moving in this direction' through initiatives such as PLI and Make in India.
'Continued government support is vital to power our transition to a manufacturing economy. Companies can greatly benefit from aligning their strategies with national objectives. Renewable energy, defence, and digital infrastructure are becoming sunrise industries in India,' notes Mahindra.
Globalisation reborn
He reiterates that economic nationalism 'does not spell the death of globalisation but heralds its rebirth'. Globalisation is evolving: US market centrality and China-centric supply chains are being replaced by multi-polar, regional collaborations.
As structural and political uncertainties diminish US dominance, alternative capital destinations are emerging. Similarly, global supply chains are diversifying away from China, creating new trade partnerships.
As Mahindra puts it, lower tariff barriers among regional partners may emerge, boosting free trade and reshaping international trade centres of gravity. The US shift toward de-globalisation may actually lead to a 'new avatar' of globalisation which is multi-polar, regional, and driven by domestic imperatives.
'In such shifting sands, I believe India is well-positioned to emerge as one of the new centres of gravity. We are a stable democracy, generally regarded as a trustworthy partner, and are bolstered by a strong military that is not politicised,' continues Mahindra.
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Resilience is key
Whether it be a country or a business, the winners will be the ones who can successfully navigate uncertainty and ambiguity – the ones who are resilient. In the case of the Mahindra group, he says resilience has been its mantra for over eight decades where it has adapted, transformed and evolved.
'Our federated structure, symbolised by the banyan tree is key to this resilience. Mahindra & Mahindra's core businesses — auto and tractor — form the trunk, while the aerial roots represent new ventures that anchor themselves independently, expanding resilience and reach,' explains Mahindra.
This structure provides agility and flexibility to adapt swiftly to geopolitical and economic uncertainty. Independent decision-making within each business ensures alignment with shared values while leveraging synergies across the group.
'Success in one branch strengthens the entire tree, while failures are ring-fenced to protect the broader ecosystem. Like the banyan tree that endures storms and thrives in diverse conditions, the Mahindra Group is poised not just to survive but to flourish, even in turbulent times,' signs off Mahindra.