India Faces New Trade Barriers Amid Global Policy Shifts

India must prepare for challenges posed by non-tariff barriers like the EU carbon tax, according to DGFT Santosh Kumar Sarangi. Measures, such as the US Inflation Reduction Act and EU's CBAM, aim to bolster domestic manufacturing potentially violating WTO commitments. India's trade strategy needs adaptation.

India is bracing itself for potential trade challenges as non-tariff barriers like the EU carbon tax come into focus, according to DGFT Santosh Kumar Sarangi, who spoke at a recent CII export competitiveness conclave.

Sarangi highlighted that the US and EU are leveraging legislative measures such as the Inflation Reduction Act and the Carbon Border Adjustment Mechanism to enhance local manufacturing, creating obstacles for exports from developing nations.

While noting these measures may breach WTO commitments, Sarangi emphasized the need for India to adapt its trade strategies to mitigate impacts, as seen in the previous Trump administration's tariff hikes on national security grounds.

(With inputs from agencies.)