Navigating Non-Tariff Barriers: India's Strategic Export Response

India's exports face challenges from non-tariff measures like the EU's carbon tax. High import duties, logistical costs, and aggressive policies from nations such as the USA and UK are additional hurdles. India plans to boost MSME support and strengthen export credit through new government schemes.

India is grappling with increasing non-tariff measures from developed economies, including the European Union's carbon tax and deforestation regulation, which restrict access for Indian goods in these markets. Director General of Foreign Trade, Santosh Kumar Sarangi, highlighted these concerns during a post-Budget webinar, pointing to challenges like high import duties, insufficient global value chain integration, and logistical costs.

Sarangi addressed additional issues such as the aggressive industrial strategies by the USA and UK, which further narrow India's export opportunities. He also noted the inadequate export credit, with a current provision of USD 124.7 billion against an estimated requirement of USD 284 billion for the fiscal year 2023-24, spotlighting a significant financial gap.

In response, the government, in collaboration with commerce, MSME, and finance ministries, is developing new schemes to enhance credit access for MSME exporters and tackle non-tariff barriers. The initiatives include expanding Export Credit Guarantee Corporation coverage, facilitating collateral-free export credit via EXIM Bank, and promoting sustainability standards in line with the export promotion mission featured in the Union Budget for 2025-26.

(With inputs from agencies.)