The coming trade challenges that India will have to get ready to deal with

India will have to get ready for future trade challenges, including new tariffs and taxes from countries like the US and the European Union, according to Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi.

Speaking at a Confederation of Indian Industry (CII) event on Wednesday, Sarangi addressed potential barriers like the EU's Carbon Border Adjustment Mechanism (CBAM) and deforestation regulations.

These measures, along with potential tariffs, could violate World Trade Organization (WTO) rules, Sarangi explained. He highlighted actions by the US, such as the Inflation Reduction Act and CHIPS Act, as examples of countries trying to boost domestic manufacturing. Sarangi noted that such measures often create hurdles for developing economies.


He said, “So both the combination of non-tariff measures as well as potential tariff measures in clear violation of WTO (World Trade Organisation) commitments is something which India has to brace up in future to deal with.”

Regarding potential US tariff increases under the incoming administration, Sarangi advised a cautious approach. He noted the difficulty in interpreting statements made by the US President-elect and said further analysis is needed.

Sarangi added, “But what I have understood from what he was saying is that his main intent is that reciprocity will matter in future.” Sarangi acknowledged that while some potential tariffs could violate WTO rules, the previous US administration had used national security as a justification for such actions.

The DGFT chief concluded by highlighting India's high tariffs in some sectors like agriculture, suggesting potential reciprocal tariffs from the US might not have a significant impact. However, he also acknowledged the possibility of impact on other traded items and emphasised the need to wait for more detailed information before assessing the full effects.