India is shooting itself in the foot on trade — again

President-elect Donald Trump has threatened tariffs on Indian imports, but India’s trade policy issue lies more in non-tariff barriers, specifically Quality Control Orders. These orders unpredictably restrict imports and harm local industries by monopolizing resources and fragmenting supply chains, ultimately hurting India’s economic productivity and job creation.

India is diversifying its export basket, focusing on products like banana, ghee, solar PV modules, and alcoholic beverages. The goal is to increase the global share of these products, targeting markets such as the US, EU, China, Japan, and more. Export revenues are expected to surge due to government incentives and global demand.

India aims to surpass $1 billion in organic product exports by next year, with significant growth in the last decade. The country is working on MRAs for delicate exports like fisheries. Tobacco exports are projected to grow 8% to over Rs 13,000 crore this year, maintaining controlled production.

India’s tobacco exports are set to grow by over 8 per cent and exceed Rs 13,000 crore this year. The Tobacco Board supports farmers through various measures to enhance income and production quality. India’s production is regulated to meet domestic and export demands, ensuring stability for the tobacco industry.

India should seek comprehensive engagement with the incoming Trump administration to address issues in trade, investment, technology, and finance. A focus on maintaining supply lines and diversifying markets is vital, particularly for sectors like pharmaceuticals, jewellery, and services. Leveraging opportunities from US tariff actions is crucial.

Initiating a trade war with India is not beneficial for the US as previous policy shifts under the Trump administration showed temporary setbacks followed by recovery. India’s trade surplus with the US declined initially but later resumed growth due to resilient and strategic responses from India.

India’s exports of goods and services are expected to surpass USD 814 billion in 2024, a 5.58 per cent increase from 2023. While machinery and electronics exports are growing, traditional sectors such as textiles and garments are declining, highlighting both opportunities and challenges amid sluggish global trade and geopolitical tensions.

APEDA has updated the National Programme for Organic Production regulations. The changes aim to make it easier for farmers and boost India’s organic food exports to USD 2 billion by 2030. New features include clearer certification processes and better transparency. India’s organic exports have been growing, with main markets in the USA, Europe, and Asia.