Amid the US tariff pause, India Inc CFOs are seizing new opportunities. They are reconfiguring sourcing, pricing, and risk-management models to diversify and manage cost migration.
(Source: freepik)
As India braces for finalizing a trade agreement with the US before the July 9 deadline for tariff suspensions and new trade policy, exporters come face to face with tariff rises and fractured supply chains. To navigate this uncertainty, sustain growth, and turn protectionist tides into strategic opportunities, Indian CFOs are recalibrating their playbooks and fast evolving —from finance stewards to strategic risk architects.
The US government imposed a 26 percent reciprocal tariff on Indian goods on April 2, 2025, as part of Trump’s new trade policy, which also included a 10 percent baseline tariff on imports from all countries. The 26 percent tariff was put on hold for 90 days—until July 9, 2025—while the 10 percent tariff stayed in place.
Prime Minister Narendra Modi and the US President Donald Trump met in February this year and committed to finalizing a bilateral trade agreement by fall 2025, with a shared goal of doubling trade to $500 billion by 2030. Both nations are actively negotiating an interim trade deal, and held intensive discussions throughout June to resolve outstanding issues before the suspension expires.
These tariff conundrums are especially difficult for auto component and pharmaceuticals sectors that make up around 70-80 per cent of export to the US. There is a need for careful capital allocation, market and supply chain diversification with markets like China and EU.
While these announcements have led to difficulty in managing costs, especially at the beginning of the year for exporters, CFOs take it as a mixed bag. The sentiment among India Inc’s finance chiefs is clear: the tariff war is not just a headwind—it’s a reset moment for supply chains, pricing strategies, renegotiating agreements, diversifying customer base and product portfolio and preparing for long-term investment and growth plans.
On the sidelines of the CII CFO Leadership Conclave held recently in New Delhi, Rohit Nanda, Group CFO of Gurugram-headquartered auto component manufacturer Sona Comstar emphasised that the US is difficult to replace though there are good alternatives, such as the EU. He warned that the world order is changing—and probably permanently. Global trade over the last 20 to 30 years has grown and will likely shrink in the coming decades. But that creates opportunities for those prepared: there will be M&A possibilities to help target markets and product areas.
“Uncertainty will persist, but we must build long-term solutions for business sustainability,” said Varun Gupta, CFO of a global chemical manufacturing firm, Jubilant Ingrevia, who is actively exploring backward integration, asset reallocation, and China+1 sourcing strategies to protect supply chain resilience. “Gone are the days of scaling in just one market. The future lies in proximity sourcing and diversified portfolios,” he said.
For Gupta, the tariff war is not a setback—but a strategic opening. “In the US, Indian chemical companies are finding an edge over Chinese peers. Cost is no longer our weakness—quality, speed, and service matter more. “We’re investing in local sales and branding teams to build enduring customer relationships,” he added.
CFOs also note the importance of building long-term, meaningful businesses rather than chasing tactical wins. “If the tariff war gives you an edge, you go in for the kill—but not without a 24–30 month readiness plan,” said Nanda. “There are no shortcuts. You test, build, and then scale,” he added.
Trade Diversification, Compliance, and Cost Discipline
The finance chiefs, at the event, suggested that while the short-term presents challenges, the long term could offer opportunities for strategic investments and market expansion, with FTAs potentially providing a sanctuary amidst global trade changes.
“FTAs can serve as a sanctuary, but capital investment decisions are irreversible. Therefore, it is obvious to diversify geographically and be less dependent on countries like the US,” said Nanda.
While the ongoing FTA wave—from the UK (99% duty-free access) to UAE (80%) and Australia (85% rising to 90 per cent by 1 January 2026)—has opened up promising avenues, Yashpal Jain, CFO of Sandhar Technologies, a global manufacturer of automotive components, cautions that compliance burdens and technical barriers to trade are growing rapidly.
“Free trade agreements come with layers of regulation—country-of-origin norms and preferential duty clauses. The role of the CFO now includes negotiating agreements with a fine balance between cost efficiency and full compliance,” he said.
According to a CII survey, over half of Indian firms struggle with the complexity and cost of meeting multiple international standards, particularly in high-tech sectors.
Jain added that the finance function now overlaps heavily with legal, procurement, and supply chain, emerging as a “core force” in shaping deal structures and mitigating regulatory risk.
“Capital constraints remain a challenge, particularly in the high tech and innovation driven industries like smart manufacturing, renewables and auto,” he said .
Rudra Kumar Pandey, Chairman-CII Regional Committee on Economic Affairs and Taxation (Partner Shardul Amarchand Mangaldas & Co) said that India needs a clear roadmap for global standards, financial incentives for quality infrastructure, and public-private partnerships for technology transfer and certification.
New Trade Order: CFOs emerging geopolitical analyst and transformation champions
The finance chiefs believe that India is transitioning from a manufacturing alternative to a strategic partner in global supply chains, emphasizing the need to overcome non-tariff barriers too, such as global standards compliance.
Whether responding to tariff shocks, diversifying sourcing across geographies, or recalibrating export strategies based on new FTAs, at the end of the day, CFOs are expected to make their business future‑ready.
“The role of CFOs is evolving to focus on supply chain resilience, risk mitigation, and sustainable growth, moving beyond cost containment,” Pandey said.
“They (CFOs) are no longer about closing the books, but opening new chapters. In my experience, CFOs are tracking customs updates and trade agreements rather than just accounting standards. CFOs are becoming geopolitical analysts and transformation champions,” Saumil Shah, Partner, Grant Thornton Bharat put things in perspective.
According to Sandhar Technologies’ CFO, the last three years have transformed the CFO’s role. “Tariff tremors shook the global trade map. Today’s CFO is not just managing capital but is deeply involved in risk de-risking, ESG compliance, and resilience building. Tomorrow’s disruption could be geopolitical, regulatory, or even technological,” Jain opined.
While India negotiates broader market access, CFOs are already positioning for the next wave—FTAs with the EU, deepening QUAD (Quadrilateral Security Dialogue) trade partnerships, and reducing exposure to volatile regions. Yet, as Indian firms still face challenges from non-tariff measures, the road ahead requires not just negotiations but capability building.
“We are in a global shakeup. Governments and industries must align. Fair ground-level assessments and structured policy feedback loops are essential. Replacing the US is tough, but exploring other markets is no longer optional—it’s imperative” Jain added.
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