Supply Chain Finance hub 2025: Navigating tariffs and solutions

In 2025, global supply chains will no longer be shaped solely by cost efficiency and operational speed. Instead, they are being redefined by tariffs, protectionism, and geopolitical tensions.

The once-linear trade networks are increasingly exposed to unpredictable policy shifts, trade wars, and currency risks. Against this backdrop, supply chain finance (SCF) is emerging as a tool of liquidity optimisation and a strategic buffer against global volatility.For corporates, the challenge is twofold: higher costs due to tariffs and delayed cash cycles due to uncertainties in trade flows. What was once a predictable global supply web is now a patchwork of shifting alliances and tariff zones.The expanding role of Supply Chain FinanceSupply chain finance traditionally enabled buyers to extend payment terms while allowing suppliers faster access to capital. In the age of tariffs and trade tensions, its role is evolving to become a risk management and resilience enabler.Hedging against tariff shocks: SCF provides liquidity cushions to suppliers facing sudden cost spikes from tariffs. Buyers can use financing models to ensure supply continuity even in high-cost trade corridors.Supporting supplier diversification: As firms relocate production bases from China to Southeast Asia, Africa, and India, SCF helpsintegrate these fragmented ecosystems with global capital.Technology integration: Blockchain-enabled platforms and AI-driven credit analytics deliver real-time financing visibility, which is critical when geopolitical decisions can alter supply routes overnight.SCF is no longer just about bridging working capital—it is about building agility into financial flows.India’s opportunity as a global hubIn this evolving scenario, India has a unique opportunity to establish itself as a supply chain finance hub. Its digital public infrastructure lays the groundwork for transparent, interoperable financing ecosystems, including the Unified Payments Interface (UPI) and the Open Credit Enablement Network (OCEN). With over 60 million MSMEs, many of which remain underserved by traditional banks, fintech-led SCF can unlock massive supplier liquidity.Moreover, India’s strategic trade position—balancing partnerships with the West while engaging with ASEAN, Africa, and the Middle East—positions it as a natural intermediary in turbulent global trade flows. By fostering collaborations between banks, fintechs, and policymakers, India can become the trusted node where global capital meets regional supply chains.Resilience over efficiencyThe era of “just-in-time” supply chains is fading. Companies are realising that resilience outweighs efficiency in a world of tariffs and political volatility.

This requires financing models that support inventory buffers, multi-country supplier diversification, and long-term supplier relationships. SCF can incentivise these shifts by aligning capital flows with resilience goals, not just cost optimisation.The data imperativeData as the new currency will be at the core of future SCF ecosystems. Real-time data on trade flows, payment histories, and supplier performance will allow financiers to underwrite risks more accurately, even in uncertain markets.

For India, leveraging its Aadhaar-enabled KYC systems, GST data trails, and e-invoicing frameworks can provide unprecedented transparency, reduce credit risk, and attract global investors to its SCF platforms.The way forward

By 2025, tariffs and trade tensions will no longer be temporary shocks; they will be structural features of global commerce. Companies that continue to prioritise cost efficiency over resilience risk losing competitiveness in volatile markets.

Supply chain finance, empowered by technology and driven by collaboration, is poised to be the key enabler of resilience.With its digital backbone, fintech dynamism, and strategic trade position, India is well-placed to emerge as the global supply chain finance hub of the future. Doing so can transform trade tensions into opportunities, ensuring that capital and commerce continue to flow despite the turbulence.Contributed by: Dr. Satchidananda Tripathy, Assistant Professor, Department of Management Paari School of Business, SRM University, APDisclaimer - The above content is non-editorial, and TIL hereby disclaims any and all warranties, expressed or implied, relating to it, and does not guarantee, vouch for or necessarily endorse any of the content.