CHAIRMAN’S MESSAGE Dear Shareholders, 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.” The old order — social, political, and economic — has been rudely shaken, and a new one has not quite emerged. At the time of writing, the world is in a state of flux, like the great Samudra Manthan. The legend goes that the gods and the asuras united to churn the great cosmic ocean to obtain the Amrit, the nectar of eternal life. As the ocean roiled however, what initially emerged was a deadly poison — so toxic that it could wipe out all of creation. Lord Shiva saved the situation by swallowing all the poison, and after that, many positive elements emerged, including Lakshmi, the goddess of prosperity, and of course, the precious Amrit. 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. From the industrial revolution to globalisation, from the digital age to climate change, 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. These measures are sparking global responses, including retaliatory tariffs, disrupted supply chains, shifting political alliances, and economic groupings. The situation 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. 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. 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. 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. 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. 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. 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. The potential exists, but 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. In a scenario with so many moving parts, it is difficult to predict outcomes. However, two significant implications of the current manthan offer opportunities that India must leverage: MAHINDRA & MAHINDRA LTD.
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