India’s export capacity is coming under pressure as ongoing trade deal negotiations with the European Union and expectations of tariff relief in key markets reshape shipment flows and production planning, according to trade and industry sources.
Exporters said anticipation of lower duties and improved market access is prompting buyers to delay orders or renegotiate contracts, leading to short-term disruptions in capacity utilisation across several export-oriented sectors. Industries such as engineering goods, textiles, chemicals and auto components are among those experiencing tighter margins and planning uncertainties.
At the same time, manufacturers are recalibrating production and inventory strategies to align with potential changes in tariff structures once the EU deal is finalised. While the long-term outlook remains positive, the transition phase is creating near-term bottlenecks in export scheduling and logistics.
Industry bodies have urged policymakers to provide clarity on timelines and interim measures to help exporters manage demand fluctuations. They also highlighted the need for improved port efficiency and logistics support to ensure that Indian exporters can respond swiftly once tariff relief comes into effect.
Trade experts said that once negotiations conclude, enhanced access to the EU market could unlock significant export growth, provided capacity constraints and supply-chain pressures are addressed in time.
