By Sanskriti Global Exports by Himanshu Gupta
Navigating the Crosscurrents: A Strategic Briefing for Indian Trade Professionals
The final quarter of 2025 is proving to be a watershed moment for Indian foreign trade. As the global economic landscape continues to recalibrate, a confluence of regulatory shifts, high-stakes negotiations, and domestic policy discussions is creating a complex but opportunity-rich environment. For the astute importer and exporter, staying ahead of these developments is not just advantageous; it's essential for survival and growth. This week's roundup cuts through the noise to bring you the analysis you need on the four key stories shaping your business: the operationalization of the EU's carbon tax, the nail-biting conclusion to the India-UK FTA talks, a potential new wave of PLI schemes, and a critical look at our logistics backbone.
This Week’s Global & Domestic Trade Roundup
Our analysis of the key events from the week ending November 22, 2025, reveals a clear picture of tightening global standards and India's proactive policy response.
1. European Union's CBAM Enters Financial Phase: The Carbon Clock is Ticking
The transition period is over. As of this month, the European Union's Carbon Border Adjustment Mechanism (CBAM) has moved from a reporting-only requirement to its financial implementation phase. Indian exporters in the targeted sectors—primarily iron and steel, aluminium, cement, fertilisers, and hydrogen—are now facing the direct cost implications. Under the new rules, EU importers must purchase and surrender CBAM certificates corresponding to the embedded carbon emissions of their imported goods. This effectively places a price on the carbon footprint of Indian products entering the world's largest single market. Initial reports from Brussels indicate that the system is live, and the first declarations requiring financial settlement will be due at the end of this quarter. The Indian Ministry of Commerce has responded by fast-tracking its own carbon verification and certification framework, but many SMEs are scrambling to ensure their compliance and emissions data are robust enough to withstand EU scrutiny.
2. India-UK FTA: Down to the Wire on 'Sensitive' Sectors
The long-awaited Free Trade Agreement with the United Kingdom is reportedly in its final, most challenging stage. Sources from both New Delhi and London suggest that over 95% of the deal is concluded, but a few critical and commercially sensitive areas remain sticking points. These include rules of origin for electric vehicles and components, tariff reductions on Scotch whisky and automobiles, and frameworks for data localization and intellectual property rights in the services sector. The pressure to sign the deal before the year's end is immense, with both governments eager to showcase a major post-Brexit trade victory. However, Indian industry bodies are urging negotiators to hold firm on protecting domestic manufacturing, particularly in the auto-component and dairy sectors. A breakthrough is anticipated within the next fortnight, but the final text will require immediate and intense scrutiny from businesses on both sides.
3. Government Signals 'PLI 2.0' to Boost High-Value Manufacturing
Riding on the back of stellar export figures in electronics—which have reportedly surpassed $35 billion on an annualized basis—the Indian government is actively considering a second, more ambitious iteration of the Production-Linked Incentive (PLI) scheme. Internal discussions within the NITI Aayog and the Department for Promotion of Industry and Internal Trade (DPIIT) are focused on identifying new champion sectors. The frontrunners for 'PLI 2.0' are said to be capital goods, medical devices, and specialized chemicals. The objective is twofold: to reduce import dependency on critical industrial machinery and healthcare equipment, and to position India as a global hub for high-value, technology-intensive manufacturing. While an official announcement is likely reserved for the 2026 budget, the industry is already abuzz with anticipation, with potential investors mapping out opportunities.
4. Logistics Update: IMEC's First Trials Meet JNPT's Growing Pains
The logistics sector presents a mixed picture. On a positive note, the first containerized trial runs along the India-Middle East-Europe Economic Corridor (IMEC) have been declared a qualified success. A consortium of logistics firms reported that a multi-modal shipment from Mumbai to Piraeus, Greece, via the UAE and Saudi Arabia, was completed in 14 days, shaving nearly 30% off the transit time compared to the traditional Suez Canal route. However, this promising development is contrasted by persistent congestion at the Jawaharlal Nehru Port Trust (JNPT). Despite ongoing capacity enhancements, the port is struggling with high vessel turnaround times and yard congestion, exacerbated by a pre-Diwali import surge. This bottleneck is a stark reminder that while ambitious new corridors are being built, strengthening the capacity and efficiency of our core domestic infrastructure remains a critical and urgent challenge.
Implications for Indian Import-Export Professionals
- CBAM Compliance is Non-Negotiable: If you export steel, aluminium, or other covered goods to the EU, your carbon accounting must be impeccable. Invest in third-party verification and explore greening your supply chain. Be prepared to factor carbon costs into your pricing, as EU buyers will be highly sensitive to it. This could also be an opportunity for low-carbon producers to gain a competitive edge.
- UK FTA - Prepare for Rapid Change: Businesses with UK exposure must prepare for multiple scenarios. Conduct a detailed analysis of your product's tariff lines under potential FTA conditions. For exporters, this could mean new market access. For importers, it could mean new competition. Supply chain and distribution strategies may need to be revised overnight once the deal is signed.
- Watch for PLI 2.0 Opportunities: If you are an importer of capital goods or a manufacturer in the medical device/specialty chemical space, the forthcoming PLI scheme could be a game-changer. It may present opportunities for domestic expansion, joint ventures, and technology transfers. Stay connected with industry bodies for the latest updates.
- Diversify Your Logistics Strategy: Do not rely on a single port or shipping route. While JNPT remains a primary gateway, explore using alternative ports on both the west and east coasts to mitigate congestion risks. For high-value, time-sensitive cargo to Europe, begin conversations with freight forwarders about the feasibility and cost of using IMEC once it becomes commercially operational.
Conclusion: Agility is the New Currency in Trade
The message from this week's developments is unequivocal: the landscape of international trade is becoming more regulated, more competitive, and more complex. Success is no longer just about price and quality; it is about navigating carbon taxes, understanding intricate trade agreements, leveraging domestic policy support, and building resilient, multi-modal supply chains. Indian businesses that embrace this complexity with agility, strategic foresight, and a commitment to compliance will not only weather the ongoing shifts but will be best positioned to capitalize on the immense opportunities that lie ahead.
Source: Original