India has raised concerns over trade restrictions imposed by developed nations, citing World Bank data that identified 350 Non-Tariff Measures (NTMs) in the U.S. alone in 2023. The Directorate General of Foreign Trade (DGFT) has particularly highlighted measures such as the Carbon Border Adjustment Mechanism (CBAM) and the European Union Deforestation Regulation (EUDR), arguing that such policies restrict market access under the pretext of climate action and energy transition.
NTMs, including Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) measures, often create hurdles for exporters. TBTs encompass strict technical regulations, voluntary standards, and certification procedures, impacting industries such as agriculture and manufacturing. Similarly, SPS measures impose stringent food safety norms, affecting exports of edible products, livestock, and plant-based goods.
Beyond regulatory challenges, India’s high logistics costs remain a critical barrier to export competitiveness. According to the National Council of Applied Economic Research (NCAER), India’s logistics costs stand at 8.9 per cent of GDP, significantly higher than the 5-6 per cent seen in developed economies. The DGFT has emphasized the need for enhanced port infrastructure, Inland Container Depots (ICDs), cold chain systems, and warehousing to bring down logistics costs and improve efficiency.
To tackle this, India launched the PM Gati Shakti initiative on October 13, 2021, aiming to enhance multimodal connectivity and lower transportation expenses.
Now, there are plans to expand its scope beyond domestic borders, integrating district-level planning and international infrastructure projects. The PM Gati Shakti experiential centre in New Delhi has also received global recognition, with former Hawaii Supreme Court Justice Michael Wilson recently commending its approach.
Despite efforts to boost exports, India faces structural challenges, including weak domestic manufacturing competitiveness, high import tariffs, and insufficient integration with Global Value Chains (GVCs). The Economic Survey 2024 underlined that technology remains a critical differentiator, and India must accelerate innovation to remain globally competitive. The DGFT also pointed to protectionist industrial policies like the U.S. Inflation Reduction Act (IRA), the Chips Act, the UK’s Advanced Manufacturing Plan, and the EU Green Deal, arguing that these strategies have further narrowed India’s export opportunities.
Additionally, India’s manufacturing sector has remained stagnant at 13-14 per cent of GDP over the past five years, signalling an urgent need for policy interventions and strategic reforms to drive sustainable export growth.