Mumbai: For Indian companies with a global reach, navigating regulatory complexity has moved from the sidelines to the center of corporate strategy. Regulations on trade, tariffs, environment, labor, data, and taxation are changing rapidly and increasingly shaping business outcomes.Import restrictions, carbon taxes, anti-dumping duties, subsidies and localization norms are changing cost structures, market access and competitiveness, directly impacting product pricing, profit margins and capital allocation. Companies are now incorporating regulation into the core business plan rather than treating it as a compliance exercise. The management of Tata Steel, which oversees operations in India, UK, EU and Canada, highlighted this in the recent earnings call. Managing regulatory complexity has become a strategic imperative across all geographies, said CFO Kaushik Chatterjee. He pointed to Tata Steel’s Netherlands operations as an example. During 9MFY26, the unit recorded an operating profit of EUR 210 million after absorbing carbon emissions-related costs of EUR 150 million and the impact of EUR 50 million from US tariffs. Without these regulatory-linked costs, operating profit would have been above 400 million euros – showing how much of an impact the policy has made on the bottom line.Smaller players also have to face similar pressure. Pankaj Chadha, partner, Jyoti Steel Industries, said rapidly changing regulations leave little room for maneuver, often forcing companies to rely on customers for real-time information. In one case, a Mexican customer told him that Japanese steel was cheaper than Indian steel because of the zero-duty trade arrangement compared to the 35% import duty on Indian steel. “Can you believe that Japanese steel was cheaper than Indian steel? I had never heard of it until then. Understanding and incorporating regulations is now part of business. The meetings start with this,” said Chadha, president of engineering export body EEPC.Ankita Singh, founder of law firm Sarvank Associates, calls this the beginning of the era of “regulated strategy”, where navigating the global legislative maze becomes a competitive advantage. “Regulatory risk is no longer a cost center but an existential metric, prompting boards to move from a ‘wait and see’ approach to a ‘preventive vigilance’ model that embeds compliance in the architecture of products and supply chains,” he said. Madhavan Srivatsan, senior partner at Emerald Law, agrees. “Gone are the days when Indian companies took regulatory issues lightly,” he said. “With increased regulatory scrutiny, mandatory self-reporting obligations and the risk of tougher penalties, compliance is now one of the most important tasks.” Responsibility also moves up the management chain. “Any instance of non-compliance can expose directors to civil and even criminal liability, in some cases on a strict liability basis where intent is irrelevant,” Srivatsan said. While conditions have improved for Tata Steel’s Netherlands unit after the European Union imposed carbon costs on emissions-intensive imports from January 1, the same measures have raised the cost of India’s exports of steel, cement, aluminum and fertilizers. From June, the EU will also cut import quotas and raise duties on volumes above that limit from 25% to 50%, favoring domestic producers. Meanwhile, Chadha is hopeful that India will sign a trade deal with Mexico.
