By Sanskriti Global Exports by Himanshu Gupta

Trade Winds Shift: Analysing the Latest RoDTEP Revisions, EU FTA Progress, and Global Headwinds

Date: October 29, 2025

Good morning, colleagues. As we move towards the end of another dynamic quarter, the global and domestic trade landscapes are presenting a familiar mix of challenges and significant opportunities. This week’s developments are particularly noteworthy, carrying direct financial and strategic implications for Indian importers and exporters. From crucial policy revisions in New Delhi and a landmark breakthrough in Brussels to new maritime regulations and commodity market volatility, the currents of global commerce are shifting once again. For the prepared professional, these shifts are not threats, but signposts for future growth. In this comprehensive briefing, we will dissect these key events and, most importantly, translate them into actionable intelligence for your business.

Factual Summary of Key Developments

This week's roundup is dominated by four critical pieces of news that every Indian trade professional should have on their radar.

1. DGFT Announces Revised RoDTEP Rates for Key Sectors

In a much-anticipated move, the Directorate General of Foreign Trade (DGFT) issued a notification revising the rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. The revision, effective from November 1st, 2025, primarily targets high-potential export sectors including electronics and semiconductors, pharmaceuticals, and technical textiles. Sources within the Ministry of Commerce suggest the new rates reflect an updated assessment of the embedded, non-creditable taxes in the production chain. The average rate increase for the targeted electronics sub-sectors is reported to be between 0.75% and 1.5%, providing a significant boost to the competitiveness of goods manufactured under the Production Linked Incentive (PLI) schemes.

2. Major Breakthrough in India-EU FTA Negotiations

After several rounds of intense negotiations, Indian and European Union trade representatives have announced a 'framework agreement' on two of the most contentious chapters of the proposed Free Trade Agreement: Rules of Origin and Sanitary and Phytosanitary (SPS) Measures. While the final text is yet to be ratified, reaching this consensus signals a major political will to conclude the landmark trade deal by mid-2026. The agreement on Rules of Origin is expected to provide clear guidelines on value-addition norms, while the SPS chapter aims to streamline and harmonise standards for agri-products, a major win for Indian agricultural exporters.

3. IMO Confirms Stricter 'CarbonIntensity 2026' Regulations

The International Maritime Organization (IMO) has formally ratified its 'CarbonIntensity 2026' regulations, which will impose stricter limits on carbon emissions for global shipping fleets. Starting January 1, 2026, vessels will be required to meet new, more demanding Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) ratings. Major shipping lines, including Maersk and MSC, have already indicated that this will necessitate fleet upgrades and the use of more expensive, cleaner fuels. The immediate consequence will be the introduction of a 'Green Transition Surcharge' or similar levies on freight rates globally, beginning as early as Q3 2026.

4. Global Steel Prices Slump on Oversupply Concerns

The global commodity markets have been shaken by a sharp downturn in steel prices, with benchmark hot-rolled coil (HRC) futures dropping nearly 15% over the past month. Analysts attribute the slump to a combination of weakened domestic demand in China and a subsequent surge in their steel exports. This has created an environment of global oversupply, putting downward pressure on prices worldwide. While this is a boon for steel-importing industries, it poses a significant challenge for domestic steel producers and exporters in India.

Implications for Indian Import-Export Professionals

Understanding these events is only the first step. The critical task is to map their direct impact on your operations. Here are the key strategic takeaways:

• Enhanced Competitiveness for Key Export Sectors: The RoDTEP rate revision is a direct fiscal benefit. Exporters in electronics, pharma, and technical textiles must immediately instruct their finance and logistics teams to update their export costing and pricing models. This enhanced margin can be used strategically to either increase profitability or offer more competitive pricing in key markets like the US and Middle East.
• Strategic Gateway to the European Market on the Horizon: The India-EU FTA breakthrough is a long-term game-changer. While the benefits are not immediate, smart businesses should start preparing now. This includes conducting due diligence on EU compliance standards (like REACH and CE marking), identifying potential distribution partners in Europe, and aligning product development with European consumer trends. For agri-exporters, understanding the new SPS framework is paramount.
• Rising Logistics Costs and Compliance Burdens: The IMO's 'CarbonIntensity 2026' is an unavoidable cost increase. Exporters must factor in a 5-10% potential increase in sea freight costs over the next 18 months. It is crucial to open a dialogue with your freight forwarders now to understand their surcharge plans. Consider this a catalyst to optimise your supply chain, perhaps by consolidating shipments or exploring multimodal transport options to mitigate rising sea freight costs.
• Advantage for Engineering and Auto Ancillary Importers: The slump in global steel prices offers a significant, albeit potentially temporary, window of opportunity. Importers of steel and steel-based components for the automotive, consumer durables, and heavy engineering sectors should consider locking in current low prices through forward contracts. This can provide a substantial competitive advantage in the domestic market over the next two quarters.
• Urgent Need for Input Cost Hedging for Domestic Producers: For Indian steel manufacturers and exporters, the global price slump presents a major headwind. It will make exports less profitable and increase competition from cheap imports in the domestic market. This underscores the critical importance of hedging strategies and focusing on operational efficiency to protect margins.

Conclusion: Navigating with Foresight

The developments of this week perfectly encapsulate the modern trade environment: a complex interplay of domestic policy, international diplomacy, global regulation, and market economics. On one hand, the Government of India is providing targeted support through RoDTEP and opening massive future markets with the EU FTA. On the other, global regulatory bodies and market forces are introducing new costs and competitive pressures.

As your trusted trade advisor, my counsel is simple: agility is your greatest asset. The businesses that will thrive in 2026 and beyond are not just those who react to these changes, but those who anticipate them. Re-evaluate your export pricing, begin your EU market-entry research, budget for higher logistics costs, and strategically manage your raw material procurement. The winds are shifting, and by adjusting your sails now, you can harness them to your advantage.

Source: Original