Disruptive events such as the Red Sea crisis and the Russia-Ukraine war have caused a need to have a closer look at the role of Chief Financial Officers (CFOs). A renewed approach demands that CFOs act as a change catalyst within the automotive supply chain to tackle future hurdles. To ensure stability in the Indian automotive industry filled with technological advancements, especially in alternative energy vehicles, CFOs are acting as co-pilots of transformation in the Indian automotive supply chain, opined Former Additional Secretary of the Department of Commerce, Government of India, Anand Swarup, during the ACMA CFO and Supply Chain Conference on 28 May 2025, in New Delhi.

The event brought to the forefront discussions on how the role of CFO’s has been changing over the year and saw participation from speakers from different organisations, including Maruti Suzuki India CFO Arnab Roy, among others. 

The speakers highlighted the evolution of customer demands, market dynamics and innovation due to the volatile business environment. Speaking at the event, Partner and National Auto Tax Leader at EY India, Saurabh Agarwal, said, “The CFO no longer works as an accountant, but dons multiple hats such as a risk manager and a strategic partner for resilience.”

“The leader must focus on execution and being agile in a dynamic environment to build strong relationships with other departments and ensure faster time to market. Staying agile will help an OEM to better handle changing customer demands and be able to introduce new features and variants faster,” he added.

Enumerating how flexibility helps the CFO devise strategies for optimising auto production, managing risks and adapting to supply chain disruptions, Roy said, “Real-time decisions must be made in today’s volatile world. As a result, the CFO’s role is now expanding to cover a gamut of subjects such as sustainability, location strategy and choice of appliances. Since we are within a multi-dimensional environment at present, the CFO’s role is moving from a cost controller to a continuity architect.”

Further describing the changing role of a CFO in a volatile uncertain complex and ambiguous world, it was discussed that CFOs must act as change catalyst in the automotive supply chain. While enumerating the above, Anant Swarup said, “The CFOs are not naysayers and their image of being cost-cutting agents is gradually changing. They are supply chain whisperers and co-pilots of transformation. Data-driven risk modelling helps them make accurate future decisions and turns them into participative entities.”

The current world scenario mandates a CFO’s financial expertise to assess vendor performance, identify cost-saving opportunities and process improvements, analyse costs and mitigate supply chain risks. Alluding to the same, Roy explained, “The CFO can build a resilient supply chain through cash visibility and crisis foresight. Relocation with risk-adjusted precision is necessary as it helps prepare risk-adjusted return-on-investments models for various situations. The CFO must also build redundancies and incorporate inventory industrial planning into the company’s business plan. As the world de-globalises due to geo-political scenarios, auto manufacturers are being forced to reassess their supply chains.”    

“Seventy-five percent of automotive revenue is attributable to raw materials. Supply chain management provides a competitive edge. Yet another role for the CFO would be to optimise capital for crisis situations that may include geopolitical shifts,” Roy added.  Speaker Sunil Bohra, CFO, Uno Minda Group, while describing how CFO’s act as change catalyst in automotive supply chain, said, “Every automotive plant in India produces roughly 14,000 parts.” He explained that supply chain management must account for cost control and operational efficiency, leading to effective allocation of resources, high profitability and less waste. It is the supply chain-CFO partnership that decides the future of automotive companies and manufacturers.

Though geo-political scenarios are predominantly uncertain, CFO’s have the arsenal to make calculated decisions for mitigating risks. EY India Partner, Tax, Pankaj Jain, explained, “When changes happen at the geo-political level, we must take some calls. For example, one such concept could be focusing on developing tier II and tier III vendors in India.”

The speakers also discussed on how discipline and immense hard work during the entire shift has helped China reach where it is in the auto manufacturing sector. Highlighting the Indian scenario vis-a-vis China, President- Finance and Strategy at Minda Corporation, Ajay Agrawal, said, “India must stop trying to beat China in the manufacturing industry right now since we have only been in the supply chain business for 2-3 years. The best way forward is for us to partner with China.”  

A smart supply chain-CFO partnership is possible through digitalisation. The CFO's role today has undergone a paradigm shift, making him a partner of strategic convergence across the supply chain, finance and digitalisation as the partnership is no longer just an operational topic.

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In what may come as no surprise, United States President Donald Trump has announced 25 percent tariff and additional penalty for goods imported from India starting 1 August 2025.

The announcement was made by Trump on social media platform ‘Truth Social’, wherein he stated that ‘While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country. Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST. THANK YOU FOR YOUR ATTENTION TO THIS MATTER. MAGA!’

Over the last few months, India has been trying to work with the United States government to reach a trade deal, but no concrete deal has been finalised as of yet.

Reacting to the announcement, the Indian government stated, ‘The government has taken note of a statement by the US President on bilateral trade.  The government is studying its implications. India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective. The government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The government will take all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK.’

At present, India’s top five exports to the United States include precious stones, metals & pearls (14.3%), electrical machinery & electronics (14%), pharmaceutical products (12.6%), machinery, mechanical appliances & parts (7.7%), mineral fuels, mineral oils and products of their distillation (6.1%).

While nuclear reactors, boilers, machinery parts; mineral fuel, oil; optic, photo, medical, surgical instruments; electric machinery; and pharamecutical products were the key imports for India from the USA.

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Delhi has prohibited fuel sales to petrol vehicles older than 15 years and diesel vehicles exceeding 10 years. The ban, enforced through automated Automatic Number Plate Recognition (ANPR) cameras at fuel stations and strict penalties, impacts over 6.2 million vehicles. With transport contributing 51 percent of Delhi’s pollution (as per CSE), the policy aims to reduce emissions but raises concerns over vehicle owners’ livelihoods.

The Indian Auto LPG Coalition (IAC), the nodal body for the promotion of Auto LPG in India, emphasises retrofitting older vehicles with cleaner fuels as an immediate, cost-effective solution. Auto LPG significantly cuts emissions without requiring premature scrapping of vehicles. The IAC urges the government to simplify and incentivise retrofitting, ensuring a smoother transition for affected citizens.

As Delhi balances environmental and economic priorities, promoting Auto LPG retrofitting could offer a sustainable path forward – reducing pollution while preserving mobility and livelihoods. This approach may also serve as a model for other Indian cities battling similar air quality challenges.

Suyash Gupta, Director General of Indian Auto LPG Coalition, said, “Delhi stands at a fundamental crossroad in its battle against the rising air pollution. The current ban, while bold, will disrupt the lives of millions unless we provide a viable alternative. By promoting retrofitment to Auto LPG, we can offer immediate relief to vehicle owners and the environment alike. Auto LPG retrofitment is a proven, affordable and scalable solution that can help Delhi achieve its clean air goals without forcing citizens to scrap their assets prematurely. The government’s support in incentivising and simplifying the retrofitment process will be crucial in making this transition both practical and impactful.”

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The United Kingdom has announced nearly GBP 6 billion in new investments and export wins tied to the UK-India Free Trade Agreement (FTA), with significant implications for the automotive, aerospace and advanced manufacturing sectors. The deal, signed during UK Prime Minister Keir Starmer’s meeting with Indian Prime Minister Narendra Modi, is expected to create over 2,200 jobs in the UK.

Under the FTA, India’s average tariff on UK products will drop from 15 percent to 3 percent, with specific cuts for key sectors. Automotive tariffs of up to 110 percent will be reduced to 10 percent under a quota system, while aerospace tariffs (previously as high as 11 percent) will be eliminated. Tariffs on electrical machinery will also fall, potentially halved or brought to zero, depending on product classification.

The UK government estimates the trade deal will increase UK exports to India by nearly 60 percent and raise bilateral trade by 39 percent by 2040, compared to current projections without the agreement.

British automotive, aerospace, and advanced manufacturing players are among the biggest beneficiaries:

Rolls-Royce and Airbus will begin delivery of aircraft powered by Rolls-Royce engines to Indian airlines as part of contracts worth around GBP 5 billion. The orders are expected to support jobs in Filton, Broughton, and Derby.

International Aerospace Manufacturing (IAMPL) — a joint venture between Rolls-Royce and Hindustan Aeronautics — is investing GBP 30 million to expand its facility in Hosur, India.

Johnson Matthey will invest GBP 4 million in new plants at Taloja and Panki, supporting up to 20,000 jobs in India during construction, alongside over GBP 20 million in secured contracts for engineering and catalyst supply.

Wilson Power Solutions will invest GBP 21 million in Chennai to expand transformer manufacturing capacity.

Helical Tech is committing GBP 5.72 million in overseas direct investment (ODI) to expand its Pune facility as a global supply hub.

The agreement also unlocks procurement opportunities in India’s clean energy market and improves market access for UK manufacturers across sectors such as components, electrical machinery, and mobility technologies.

On the export front, UK companies such as Carbon Clean, Occuity, Aurionpro, DCube AI, and Kyzer Software are tapping into Indian demand for carbon capture, healthcare tech, AI, and fintech. Combined, their deals are set to contribute hundreds of millions in export value over the next five years.

Jonathan Reynolds, Business and Trade Secretary, UK, said, “The almost GBP 6 billion in new investment and export wins announced today will deliver thousands of jobs and shows the strength of our partnership with India.”

The FTA also paves the way for long-term collaboration in defence manufacturing, semiconductors, AI, quantum computing and other critical technologies.

The UK currently imports GBP 11 billion in goods from India annually. With liberalised tariffs, the government expects significant cost savings for UK firms importing automotive and advanced manufacturing components, aiding domestic production and supporting supply chain resilience.

Shailesh Chandra, President, SIAM and Managing Director, Tata Passenger Vehicles & Tata Passenger Electric Mobility, said, “The Indian automobile industry congratulates the Government of India for its tireless efforts in bringing the India–UK Free Trade Agreement (FTA) to fruition. This landmark development marks a significant step forward in strengthening India’s global economic engagement, particularly with developed economies. As two major economies enter a new phase of partnership, SIAM appreciates the Government’s extensive stakeholder consultations throughout the negotiation process. Concluding this transformative agreement amid global trade uncertainties reflects India’s growing leadership in shaping modern trade and investment frameworks.”

The commitments made by the Government of India on automobile sector tariffs strike a thoughtful balance—addressing consumer interests while supporting the broader goals of Indian industry. We view this agreement as part of a wider strategic engagement and believe it opens new avenues for collaboration and opportunity with a key global partner. SIAM remains committed to working closely with the Government of India to ensure the benefits of the agreement translate into greater growth, global competitiveness, and technological progress for the Indian automotive industry,” added Chandra.

Shradha Suri Marwah, President, ACMA, said, “The Automotive Component Manufacturers Association of India (ACMA) welcomes the signing of the India-UK Comprehensive Trade Agreement as a landmark development in the bilateral relationship between the two nations. This agreement is poised to usher in a new era of economic cooperation, fostering greater market access, technology partnerships and value chain integration between the Indian and British automotive industries. The CETA is expected to benefit the Indian auto component sector through enhanced opportunities for exports, streamlined regulatory processes, particularly in key areas such as electric mobility, precision engineering and lightweight materials. Indian MSMEs, which form the backbone of our industry, stand to gain from the liberalised terms of trade and improved access to UK markets. We are hopeful that the agreement will also promote collaboration in R&D, skilling and innovation, especially in green and digital technologies – areas that are crucial for our sector’s long-term competitiveness and sustainability. ACMA congratulates the government of India and the United Kingdom for their vision and commitment in bringing this agreement to fruition. We look forward to working with our counterparts in the UK to realise the full potential of this partnership, and to strengthen our collective contribution to global automotive value chains.”

Dr Anish Shah, Group CEO and MD, Mahindra Group, said, “The landmark trade agreement between India and the UK marks a transformative moment in the global economic landscape. It’s not just a win for trade, but a blueprint for a modern, values-led partnership that puts innovation, sustainability, and inclusive growth at the heart of global collaboration. At Mahindra, we believe deeply in the power of such cross-border partnerships to unlock economic potential, create high-quality jobs, and accelerate progress in future-facing sectors from green mobility and clean energy to digital technologies and advanced manufacturing. The UK-India Vision 2035 aligns closely with our own strategic priorities building resilient supply chains, investing in frontier technologies, and fostering a just transition to a low-carbon economy. As Indian industry becomes increasingly global in its footprint and ambition, we look forward to contributing meaningfully to this next chapter of UK-India cooperation.”

Sudarshan Venu, Managing Director, TVS Motor Company, said, “We are deeply inspired by Prime Minister Narendra Modi’s vision of Viksit Bharat and his unwavering commitment to making India a global manufacturing and design powerhouse. The signing of the India-UK Free Trade Agreement is a pivotal moment—it opens new frontiers for Indian companies to take ‘Make in India’ to the world. We are particularly excited given the launch of new Norton vehicles this year, which will benefit from the strengthening of trade links between India and the UK. It energises our global ambitions and strengthens our resolve to build world-class products and brands.”

A spokesperson for JLR said: “We welcome this free trade agreement between the UK and India, which over time will deliver reduced tariff access to the Indian car market for JLR's luxury vehicles. India is an important market for our British built products and represents significant future growth opportunities.” 

Amit Kalyani, Vice-Chairman & Joint MD, Bharat Forge, said, “Congratulations to Prime Minister Narendra Modi on the historic India–UK deal signed yesterday! #IndiaUKFTA marks a breakthrough for India’s engineering and manufacturing industries, with zero-duty access on about 99% of tariff lines covering almost 100% of trade value. Indian manufacturers can now tap into the UK market with greater competitiveness, improving their global footprint. I’d like to extend my appreciation to Hon’ble Minister of Commerce and Industry, Piyush Goyal ji for his pivotal roles in facilitating this partnership. I look forward to seeing the positive impact of this agreement on trade, investment, and economic growth in both the countries.”

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The Society of Indian Automobile Manufacturers (SIAM) convened its 11th Automotive Logistics Conclave today in New Delhi, spotlighting the shift toward more efficient and sustainable logistics in India’s fast-growing automotive sector.

Centred around the theme 'Enhancing Efficiencies in Automotive Logistics,' the event brought together key government officials, automotive leaders, and logistics service providers to deliberate strategies for building a resilient and eco-conscious logistics ecosystem.

Senior Railway Board official Hitendra Malhotra announced the introduction of specialised, higher-capacity railway wagons, including double-deck options tailored for SUVs, supporting increased vehicle transport needs.

Tapan Ghosh, Chairman of the SIAM Logistics Group and VP at Hyundai Motor India, noted that the sector has witnessed a 7.3% growth in FY 2024–25, attributing part of this expansion to enhanced logistics capabilities. Industry players highlighted a growing reliance on digital innovation, multimodal transport solutions, and rail-based logistics to increase efficiency and reduce carbon footprint.

S D Chhabra of Maruti Suzuki emphasised the integration of real-time tracking technologies and a broader push toward sustainability. Policy alignment and infrastructure development were also key focal points, with participation from leading firms including Mahindra & Mahindra, Ashok Leyland, Chetak Logistics, and APLL VASCOR.

The conclave reinforced SIAM’s commitment to green mobility, with discussions calling for industry-wide adoption of eco-friendly practices and regulatory coherence aligned with India's national sustainability goals.

Several logistics providers were recognised at the event for excellence in innovation and operations, underscoring the sector’s critical role in shaping the future of Indian mobility.

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