Globalisation 2.0: India well positioned to emerge as one of new centres of gravity: Anand Mahindra

A growing wave of protectionism is challenging decades of liberal trade order, dramatically highlighted by the Trump's tariffs, but economic nationalism does not spell the death of globalisation rather it heralds its rebirth, presenting an opportunity for India to emerge as a vital player, according to M&M Ltd Chairman Anand Mahindra.

In his address to shareholders in Mahindra & Mahindra (M&M) Annual Report for 2024-25, Mahindra, said "India, too, will face challenges" due to the ongoing global turmoil in the midst of a growing wave of protectionism.

He said globalisation is evolving and the 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, Mahindra noted.

Similarly, global supply chains are diversifying away from China, creating new trade partnerships. Lower tariff barriers among regional partners may emerge, boosting free trade and reshaping international trade centres of gravity.

"Ironically, the US shift toward de-globalisation may lead to a new avatar of globalisation '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," Mahindra asserted.

He further said, "We are a stable democracy, generally regarded as a trustworthy partner, and are bolstered by a strong military that is not politicised."

Referring to Pakistan, he said, "The situation with our provocative neighbour is always volatile, but I am optimistic that we can demonstrate the limits to our tolerance without impeding our path to economic ascendance."

These implications offer a portal to a stronger future for India and Indian companies, he noted, adding "but the future remains uncertain."

On how the Mahindra group should navigate these turbulent waters, he said, "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."

Referring to the current global situation, he said it remains fluid. 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, there remains a strong likelihood of significant decoupling between the US and China, he added.

Whatever the outcome, it is apparent that many nations will have to swallow some "poison", Mahindra said adding, "international trade has already slowed amidst heightened uncertainty and dampened investor confidence."

Noting that industries reliant on global supply chains -- like electronics and consumer goods -- will bear the brunt of rising input costs, Mahindra said "countries deeply integrated into global trade networks must rethink dependencies and diversify sourcing."

Established geopolitical alliances are being realigned, ushering in a new era of economic nationalism. Businesses worldwide will adapt by localising operations, re-engineering supply chains, and exploring alternate markets.

"India, too, will face 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," Mahindra said.

He pointed out that 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, akin to how Lord Shiva confined the poison to his throat without letting it spread (during Samudra Manthan)," Mahindra said.

He cautioned against focusing solely on mitigation saying it reflects a reactive mindset.

"Instead, we can proactively view this as an opportunity to enable some 'Amrit' to emerge," he said, suggesting to "seize this challenge as an opportunity to accelerate economic growth exhorting private enterprise to play a pivotal role in this transformation.

Mahindra noted that China's adversarial stance may create opportunities for India to position itself as a supply chain alternative -- a long-term goal for Indian business.

"Innovation and R&D 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," he said.

While the potential exists, he said achieving it will require a concerted focus on manufacturing and a palpable increase in private investment.

"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," Mahindra said.