India’s export sector is facing challenges due to stringent trade policies imposed by the United States and the European Union. These policies, including high import tariffs and evolving technological standards, have created obstacles for Indian exports, which require a 14.4% annual growth rate to meet the government’s target. Despite a rise in exports, the trade deficit remains a concern, as noted by a senior trade ministry official on March 5, 2025.
India’s exports are under pressure due to aggressive trade policies adopted by the United States and the European Union, according to a senior official from the Ministry of Commerce and Industry. The official highlighted that increasing import tariffs and stringent technological regulations in these key markets are slowing India’s export growth, which needs to rise by 14.4% annually to meet the government’s long-term trade targets.
Trade Barriers Impacting Growth
India, one of the world’s fastest-growing economies, relies on exports to sustain its economic momentum. However, evolving trade policies by the US and the EU have posed fresh challenges. The US has imposed higher tariffs on certain Indian goods, while the EU’s stringent environmental and digital compliance standards have made it harder for Indian exporters to remain competitive.
Despite a steady rise in exports, India continues to grapple with a trade deficit. According to recent trade data, the country’s exports have grown, but not at the required pace to balance imports and achieve surplus trade.
Government’s Response and Future Outlook
The Indian government is actively negotiating with both trading blocs to ease trade restrictions and secure favorable terms. Trade officials have emphasized the importance of diversifying export markets, investing in technology, and improving the manufacturing sector’s global competitiveness.
India’s export sector remains resilient, but policymakers will need to navigate global trade challenges strategically to maintain growth and bridge the trade deficit.
