Page 7 - ITLN May-June 2025

s protectionist trade policies and forward-thinking approach to
reshape global supply supply chain management.”
chains, Indian exporters— Monique Giese, Global Head
Aespecially in the automotive of Shipping at KPMG in Germany,
and pharmaceutical sectors—are highlights the shifting dynamics in
navigating a fragile yet potentially global trade as outlined in the 2025
transformative moment. With US edition of The Great Reset: Emerging
tariff hikes looming and the China-US trends in infrastructure and transport
trade standoff deepening, India is both by KPMG.
exposed to new risks and primed for “Tariffs and trade barriers tend to
unique opportunities. Industry leaders reduce global demand for shipping.
are weighing the costs of rising duties, At the very least, they add to the
the prospects of market diversification, complexity and friction of global trade.
and India’s ability to compete not just Volume growth may no longer be a
on price but on value and scale. From Prices from Indian given for shipping lines,” she notes.
generic drugs to engine components, the pharma manufacturing She further explains how these
story of India’s exports in 2025 is one of pressures could fundamentally alter
recalibration, resilience, and readiness in firms are already the architecture of global supply
the face of a shifting global order. competitive, especially chains: “One might also anticipate
According to GEP’s Outlook Report in the generic space. that global supply chains are about
2025 Procurement & Supply Chain, the Typically, these to become significantly disrupted as
global trade landscape is undergoing a products, which go off companies rewire their value chains
fundamental shift. patent, we manufacture to address new tariff risks and costs.
at the best cost. For some, that will mean significant
near-shoring to their largest customer
Vijay Shetty bases. Others may look to new export
Alkem Laboratories markets, causing shipping lanes to be
redrawn and demand for new ports
“For years, globalisation and free and operators to grow.”
trade dominated strategic thinking, The recent hike in US import
allowing companies to maximise tariffs is poised to create a significant
efficiency by leveraging low-cost financial strain on, for instance, Indian
production hubs around the world. auto component exporters, with
However, emerging trade barriers estimated earnings losses ranging
threaten to disrupt this established between ₹2,700 crore and ₹4,500 crore,
approach,” the report states. according to credit rating agency
For supply chain and ICRA’s April 2025 report. The increased
procurement leaders, this duties, though on hold, could erode
changing environment means 3–6% of the operating profits for
they must rethink traditional the overall industry and as much as
models. “A future shaped by 10–15% for exporters.
protectionist trade policies, tariffs The actual impact will hinge on how
and increased regulatory scrutiny much of the incremental costs can be
will demand a more agile, resilient passed on to buyers. While most Indian
suppliers are attempting to transfer
the added burden to customers, the
success of such efforts varies based on
multiple factors.
“The extent of pass-through would
depend on the supplier’s criticality,
share of business, competition,

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