Leveraging Data for Profit Maximization

In the face of escalating global trade uncertainties, India's economy is experiencing a shift in its trade dynamics, with high US tariffs on Indian exports posing a potential risk to the country's GDP growth. The tariffs, which can reach up to 50%, could impact India's growth by 0.6 to 0.8 percentage points, according to estimates. However, India's economy, which is largely driven by domestic demand, has shown a degree of resilience, softening the impact of these tariffs.

The increased pressure from tariffs has prompted India to accelerate economic reforms and diversify trade partnerships. This includes ongoing negotiations with the EU and the UK. The country's economic position, however, has become more vulnerable this year, with significant foreign capital outflows and currency depreciation, a common trend among Asian markets.

To counter this, India is strengthening ties with other Asian economies, such as Japan and China, in part as a response to US tariff policies. This strategic shift in regional economic relations is a promising sign of India's adaptability in a rapidly changing global trade landscape.

Another challenge facing India is the reliance on spend-based carbon estimates for ESG reporting. This approach, while common, is leading to inaccurate carbon data, misguided investments, and unclear net-zero targets. The reason for this lies in the conservative nature of many emission factors used in spend-based calculations, which can artificially raise carbon estimates.

The solution, according to the president and MD of SAP Indian Subcontinent, lies in early adoption of activity-based reporting. This method, under the GHG Protocol, avoids tariff distortions and offers greater clarity amid volatile supply chains. Activity-based emissions reporting, which uses operational data, offers more accuracy than spend-based methods. Early adoption can cut ESG costs for Indian firms, build investor trust, attract green capital, and ensure compliance.

In today's climate-conscious economy, data is a business advantage for Indian firms. Using operational data for ESG reporting can help Indian firms eyeing global growth make sustainability profitable and profitability sustainable.

Elsewhere in Asia, countries like Australia and Korea are also grappling with slowed growth due to rising uncertainty. Japan's GDP is projected to contract by over 1% despite new trade deals, highlighting the broader impact of global trade disruptions.

In light of these challenges, Indian businesses are rethinking their trade strategies, focusing on sustainability as a key factor in their growth plans. The opportunity for Indian firms is clear: make sustainability profitable, and profitability sustainable through the use of operational data.

In conclusion, India's economic growth remains resilient, but there are downward revisions indicating financial stress and emerging sustainability risks. To navigate these challenges, early adoption of activity-based reporting and a focus on sustainability could be the key to future success for Indian businesses.