US Tariffs Will Not Affect Our Group; Trump Talks A Lot But Quickly Withdraws, Says Nadir Godrej

Sometimes it feels like US President Donald Trump talks a lot, but he quickly withdraws, Godrej Industries Chairperson Nadir Godrej said on Tuesday, while speaking at the NDTV Profit Conclave in Mumbai.

The senior industrialist pointed towards Trump's recent announcements of tariffs on Canada and Mexico, which were subsequently paused for a month. "Probably, he will look for another quick transaction and let them get off the hook,“ he said.

Godrej was quick to add that Trump's announcement of reciprocal tariffs, which may include India, will not affect his business group. “We also need to stand up to such tactics with good strategies. I know India has been pre-emptive. The import duty on US bourbon was slashed to 50% from 150% and for other countries, it was reduced to 100%. For the US, we made a special exemption," he pointed out.

During the conversation, Godrej also spoke about the diversification of the Godrej Group and the importance of sustainability in Indian businesses.

Splitting The Godrej Group

In some ways, Godrej said, it was difficult to split the group as there are many advantages to having everything under one umbrella. "Yet it was a practical decision to take", he said, referring to the decision taken in May last year to amicably split the 127-year-old conglomerate.

“In our group, the management has been different for around 70 years among the two groups, although the ownership was common. So it wasn't a difficult decision to make. We tried to be fair about it on both sides and therefore it (the split) was done amicably."

On diversification within the group, Godrej said that while trying new things, there might be failure on one or two fronts. “In the past, we had our tea business, which we gave up... Nowadays, we are going into businesses where our brands are useful, and that is why we went into real estate. A good brand can be very useful in that (realty) business, where the trust levels were low."

He spoke about Godrej Capital, an NBFC. “Here again, trust is important. We'd like to go into businesses where sustainability is important, both in terms of environment and social.”

'Sustainability Is Common Sense'

Godrej reiterated that sustainability is "common sense" for businesses for multiple reasons. “If we want to save our businesses, we have to save the planet. It's sad that the US is withdrawing from the Paris Accords. I believe that even if the US government withdraws, the American people will understand the need to work together... We saw the LA fires and the floods in Pakistan. We have seen multiple climate crises in our own country.”

He stressed the importance of sustainability, stating that the cost of adaptation is greater than the cost of prevention and without a level playing field for all, it is a difficult goal to attain.

“Without a level playing field, none of us are incentivised to solve the climate change problem. With the level playing field, the cost is very small. We can only get a level playing field through cooperation or with very advanced technology."

AI In Agriculture

According to Godrej, agriculture used to face issues of scale since most of it is done on small farms in India. However, now the operations come under a network economy instead of a scale economy.

“In our oil palm business, the farmers grow the trees. We provide the planting material, we collect the fruit and we give the advice. This advice can come from AI, making it much more efficient. Similarly, FPOs (farmer producer organisations) that buy produce from farmers of one particular kind can also advise those farmers. If we link up all the farmers, then in effect we have one huge farm. Thus, correct advice can be given by AI, making farmers more efficient and sustainable.”

Demographic Dividend And Inclusion

According to Godrej, the nation cannot reap the demographic dividend if only half the population is at work.

“Obviously, we have to bring women in. The biggest barrier is education. I believe around 40% of all working women come from Tamil Nadu state. As a result of education, their families are more successful and even their men are more successful when the women are well educated.”

Emphasising on inclusion, Godrej suggested that those not included in the workforce so far should be covered by providing them with options of skill upgradation. "All need training to overcome their shortcomings and enable them to reach their true potential,” he said.