India’s export sector is navigating increasing challenges as key trade partners, including the U.S. and the European Union (EU), implement new trade regulations and policies. According to the Directorate General of Foreign Trade (DGFT), factors such as higher import tariffs, policy shifts favoring domestic industries, and evolving non-tariff measures are impacting India’s export landscape.
The U.S. has introduced measures such as the CHIPS Act, aimed at strengthening domestic manufacturing, while planned reciprocal tariffs set to take effect in April could affect Indian exports in industries such as automobiles, agriculture, and manufacturing. Analysts from Citi Research estimate that these tariffs could lead to an annual impact of nearly $7 billion for Indian exporters. Ahead of these changes, India’s Trade Minister Piyush Goyal has traveled to the U.S. for discussions on trade relations.
From April 2024 to January 2025, India’s total exports reached $682.59 billion, reflecting a 7.2% increase compared to the previous year. However, imports during the same period amounted to $770 billion, leading to a trade deficit of $87.47 billion. In addition, the EU’s carbon tax and the growing use of non-tariff barriers are further influencing India’s export environment.
Despite the growth in exports, the trade deficit underscores the importance of enhancing global market access and strengthening India’s competitive position. Experts suggest that reassessing trade and industrial strategies could help Indian businesses adapt to shifting global trade dynamics.
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