Enterprise Risk Management: India’s Path from Survival to Growth

 

In an increasingly volatile and interconnected world, Enterprise Risk Management (ERM) has emerged as more than a compliance framework. It is now a strategic imperative. ERM not only protects organizations and nations from unexpected shocks but also enables them to pursue opportunities with foresight and confidence. This article builds upon a five-part leadership series and explores India’s preparedness in light of recent U.S. tariffs, the lessons learned, and the way forward, while drawing comparative insights from China.

ERM as Shield and Compass

ERM plays a dual role. As a shield, it safeguards survival by providing resilience against shocks—be it supply chain disruptions, policy shifts, or compliance risks. As a compass, it enables growth by encouraging calculated risk-taking, facilitating innovation, market expansion, and optimal resource allocation.

India’s Current Scenario: U.S. Tariffs Through an ERM Lens

The imposition of U.S. tariffs on sectors such as steel, aluminum, and textiles underscores the importance of risk preparedness. India’s response demonstrates both strengths and vulnerabilities.

Preparedness includes the Production Linked Incentive (PLI) schemes, trade diversification efforts, and active diplomacy.

Partial preparedness reflects over-reliance on limited markets, lack of value addition, and MSME fragility.

The graphic below highlights India’s preparedness versus gaps across sectors:



What Has Been Done vs. What Should Have Been Done

ERM emphasizes anticipation rather than reaction. While India has taken commendable steps, critical gaps remain. The contrast between actions taken and those needed illustrates the importance of proactive preparedness.

Key achievements include PLI schemes, exploring alternative markets, and engaging global trade bodies. Missed opportunities include deeper value addition, accelerated supply chain diversification, and proactive policy risk scanning.

The graphic below highlights  – What Has Been Done vs What Should Have Been Done



The Roadmap: Short-Term and Long-Term ERM Measures

 

A structured roadmap is essential for India to transition from reactive to proactive risk management. This involves immediate interventions as well as systemic, long-term reforms.

Short-term measures: Diversify export markets, strengthen domestic capacity, create early warning systems, and support MSMEs.

Long-term measures: Invest in R&D, achieve supply chain sovereignty, build strategic alliances, and institutionalize ERM.

The graphic below highlights  – Short-Term vs Long-Term Measures



Lessons from China: Building Immunity Through Preparedness

China provides a valuable comparative study in embedding ERM at the national level. Its resilience stems from a strong domestic ecosystem, diversified trading partnerships, control over critical raw materials, and consistent long-term industrial policy.

For India, the key lessons include scaling manufacturing efficiency, prioritizing supply chain sovereignty, investing consistently in R&D, and aligning short-term responses with long-term strategies.

The graphic below highlights  Radar Chart – India vs China



Conclusion

Enterprise Risk Management is no longer optional—it is fundamental to both survival and growth. India’s experience with U.S. tariffs highlights resilience but also exposes systemic vulnerabilities. The way forward lies in embedding ERM into national strategy, ensuring preparedness today

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