By Sanskriti Global Exports by Himanshu Gupta

Navigating the Shifting Tides: A New Pacific Pact, Stricter EU Norms, and AI at Indian Customs

Date: 11/12/2025

Good morning. For the Indian import-export community, today’s landscape is a masterclass in duality. On one hand, strategic geopolitical alignments are carving out promising new avenues for growth. On the other, operational and regulatory headwinds are intensifying, demanding immediate attention and adaptation. This roundup unpacks four critical developments that will define trade strategies as we head into 2026: a new Indo-Pacific supply chain pact, the mandatory rollout of an AI-driven customs platform, a significant tightening of the EU’s Carbon Border Adjustment Mechanism (CBAM), and renewed volatility in freight and currency markets. For the prepared, opportunity abounds; for the complacent, the risks are mounting.

Today's Key Trade Developments: A Factual Summary

Our desk has confirmed and analyzed the following key global and domestic trade events that directly impact Indian businesses:

1. Indo-Pacific Supply Chain Resilience Pact (ISCRP) Finalised: Sources in New Delhi and Canberra have confirmed the finalisation of the Indo-Pacific Supply Chain Resilience Pact. This strategic agreement, involving India, Australia, Japan, and Vietnam, aims to create secure and resilient supply chains for critical goods, reducing dependence on single-country sourcing. The initial focus is on three key sectors: semiconductors and electronic components, pharmaceuticals (specifically APIs), and critical minerals essential for renewable energy technologies. The pact includes provisions for preferential trade terms, joint R&D, and streamlined logistics corridors among member nations.

2. DGFT Mandates 'TARANG' AI Platform for All Shipments: The Directorate General of Foreign Trade (DGFT) issued a notification making the use of its new AI-powered platform, TARANG (Trade Analytics for Risk and Global Navigation), mandatory for all import and export declarations starting February 1, 2026. The platform uses machine learning to perform real-time risk assessments, promising to fast-track clearance for compliant, low-risk shipments. However, it also introduces a more dynamic and stringent digital documentation requirement, which may pose an initial challenge for MSMEs and those with less-developed digital infrastructure.

3. EU Announces Accelerated CBAM Phase-In and Stricter Reporting: In a move that has sent ripples through industrial export sectors, Brussels announced a revision to its CBAM timeline. The transition period will now end six months earlier than planned, with full financial implications taking effect from July 1, 2026. More critically, the revised directive demands more granular, product-level carbon footprint data, moving beyond company-level averages. This significantly raises the compliance burden for Indian exporters of steel, aluminum, cement, and fertilisers.

4. Freight Costs Spike Amid Port Congestion and Rupee Volatility: A confluence of factors, including pre-Lunar New Year demand surge and unexpected labour disruptions at major transshipment hubs like Singapore and Port Klang, has led to a sharp 15-20% spike in spot container freight rates on the Asia-Europe and Trans-Pacific routes. This is compounded by a volatile week for the Indian Rupee, which has fluctuated against the US Dollar, impacting both importer costs and exporter margins. This dual pressure on logistics and finance is a significant operational headwind.

Implications for Indian Import-Export Professionals

Translating these headlines into actionable intelligence is paramount. Here is our analysis of what these developments mean for your business and the strategic pivots you should consider:

• On the Indo-Pacific Pact (ISCRP): A Strategic Opportunity
  • Diversify Sourcing and Markets: Immediately task your procurement teams to evaluate sourcing critical minerals and electronic components from Australia and Japan. Simultaneously, your export teams should aggressively target Vietnam and Australia as priority markets for pharmaceutical APIs and finished formulations, leveraging the pact's preferential terms.
  • Re-evaluate Supply Chain Maps: This is a cue to move beyond the 'China+1' rhetoric and build a concrete 'ISCRP+1' strategy. Map your end-to-end supply chain and identify opportunities to route through or source from these partner nations to enhance resilience.
  • Seek Government Incentives: Stay tuned for announcements from the Ministry of Commerce regarding Production Linked Incentive (PLI) schemes or export benefits specifically tied to the ISCRP sectors. Being an early mover will be a significant advantage.
• On the Mandatory 'TARANG' AI Platform: A Compliance Imperative
  • Invest in Digitalisation Now: The transition period to February is short. If you are still reliant on manual documentation, the time to invest in robust ERP systems and digital documentation solutions is now. Ensure your shipping bills and bills of entry are error-free, as the AI will likely flag inconsistencies ruthlessly.
  • Train Your Teams: Your logistics and compliance teams need to be trained on the new platform's requirements. Engage with customs brokers and industry associations offering workshops on TARANG to understand its nuances.
  • MSMEs Must Seek Support: Smaller enterprises should proactively approach Export Promotion Councils or the Federation of Indian Export Organisations (FIEO) for guidance and potential group training sessions to manage this technological shift without disrupting operations.
• On the EU's Revised CBAM: A Sustainability Wake-Up Call
  • Conduct Urgent Carbon Audits: Move from estimation to exact measurement. Commission detailed, product-level carbon footprint audits for all goods destined for the EU. This data is no longer a 'good-to-have'; it is a prerequisite for market access.
  • Green-Tech Investment is Non-Negotiable: The CBAM is effectively a tax on carbon inefficiency. Investing in greener production technologies is no longer a CSR activity but a core business strategy to maintain price competitiveness in the EU market.
  • Communicate Proactively with Buyers: Your European buyers will be anxious. Proactively share your carbon reduction roadmap and audit results with them. Demonstrating a clear commitment to sustainability can become a powerful competitive differentiator.
• On Freight & Forex Volatility: A Call for Financial Prudence
  • Hedge Your Exposures: Do not leave your foreign exchange exposures open. Work with your bank to use instruments like forward contracts to lock in rates for your receivables and payables, protecting your margins from currency swings.
  • Renegotiate Freight Terms: For new contracts, negotiate for longer-term fixed-rate agreements with freight forwarders where possible. For existing ones, discuss risk-sharing clauses with your buyers/suppliers to mitigate the impact of sudden spot rate hikes.
  • Optimise Container Loads: Explore options like freight consolidation (LCL) if you cannot fill a full container (FCL) to manage costs more effectively during periods of high prices.

Conclusion: The Proactive Exporter's Edge

Today’s news encapsulates the modern trade environment: high-level strategic opportunities are opening up for India, but they can only be seized by businesses that have mastered their operational, digital, and financial fundamentals. The finalisation of the ISCRP is a testament to India's growing stature in global trade, but access to these new markets—and existing ones like the EU—will be determined by our ability to adapt to new rules on sustainability and digitalisation. The proactive, informed, and agile import-export professional will not just survive these changes; they will find ways to thrive on them. The key is to act now.

Source: Original