Tata's Chandrasekaran Highlights Supply Chain Issues Amid Tariff Challenges

Reciprocal tariffs imposed by US President Donald Trump across countries are likely to be negotiated bilaterally, and companies' supply chain models will change over the next few years, N Chandrasekaran, chairman of the Tata Group, said.

Speaking at the Rakesh Jhunjhunwala memorial lecture, Chandrasekaran stated that everyone will have to wait and see how things play out. "I believe the issue is not the tariffs... The issue is the reversal of a model that we have become accustomed to over the last six to seven decades. It is a model change. If the entire world had always operated with tariffs between countries, the entire supply chain would not have become globally integrated," he said, adding that the problem is that the global supply chain has become increasingly integrated.

"To put it succinctly, in globalisation, you produce where it is cheap or efficient, and sell where there is demand. According to Chandrasekaran, this is a result of the long-standing model in use. "Now, if you change the model, the underlying supply chain infrastructure must change, which cannot happen overnight due to talent, raw material, and sourcing issues. There are numerous things. That will be the fundamental problem. I believe it will play out. "It's not going to be solved overnight," he said, adding that tariffs will not return to zero.

"I personally believe that it will not return to zero because once something is announced, some of it will remain. So, whether it settles uniformly across countries or all gets resolved bilaterally, only time will tell," he added.

Against this backdrop, Chandra stated that India is economically strong and that there will be demand for all products in the coming years, including healthcare, infrastructure, hotels, and education. "There is a lot of demand and this will go on for a long time," he added.

On artificial intelligence (AI) and the future of jobs, Chandra stated that routine jobs will be automated. "However, this does not imply that all jobs will disappear. It simply means that the nature of work is evolving. I've painted a very optimistic picture, which I truly believe is realistic. Some people believe AI will take over and eliminate all jobs, but I believe that is a mistake," he said.

Chandra stated that working hours will vary depending on the nature of the assignment. "We often talk in broad strokes about work hours — whether we'll have 40-hour weeks, 70-hour weeks, or even 90-hour weeks — but that's not how things work in reality. For many people, including myself, work is not limited to specific hours. It's more like being on 24/7, not in a stressful way, but in a natural rhythm. I sleep well, rest, and run, but my mind is always ready to go back into work mode when necessary. That's how it is when you truly enjoy what you do," Chandra explained.

The Tata Group chairman went on to say, "Take investment bankers for example. When a deal is struck, they may be unable to return home for several days. But once it's completed, they may take a week off to relax and meet friends for coffee or a glass of wine. The nature of work varies depending on the role."