By Sanskriti Global Exports by Himanshu Gupta

Navigating the Tides: PLI Scheme Review, UK FTA Progress, and Rising Costs Shape India's Trade Landscape

Date: October 28, 2025

Good morning to our readers in the import-export community. In the ever-shifting world of international commerce, staying ahead requires more than just managing logistics; it demands a keen understanding of the undercurrents of policy, diplomacy, and global risk. Today’s roundup presents a classic mix of domestic opportunity and international challenge. The Commerce Ministry is signalling a significant review of its flagship Production Linked Incentive (PLI) schemes, a major breakthrough is being reported in the long-negotiated India-UK Free Trade Agreement (FTA), and a fresh wave of geopolitical tension is pushing shipping insurance premiums to new highs.

For the Indian trader, each of these developments is a critical data point that requires careful consideration and strategic planning. Is it time to double down on domestic manufacturing? Should you be preparing your product lines for the UK market? How will rising overheads impact your margins and pricing strategy for the upcoming quarter? In this analysis, we will dissect these key events and provide a clear-eyed perspective on what they mean for your business on the ground.

Factual Summary: The Day's Key Developments

Today's trade news is dominated by four pivotal stories that span from ministry boardrooms in New Delhi to negotiating tables in London and shipping lanes across the globe.

1. Government Announces Comprehensive Review of PLI Schemes: Sources within the Ministry of Commerce and Industry have confirmed that a high-level committee has been formed to conduct a comprehensive review of the ongoing PLI schemes, with a particular focus on electronics, automotive components, and textiles. The review aims to assess the scheme's effectiveness in boosting domestic manufacturing and exports against its stated goals. The committee is also tasked with exploring the feasibility of expanding the PLI framework to new, high-potential sectors like medical devices and green hydrogen components. The announcement has been met with both anticipation and apprehension from industry bodies, who await clarity on potential changes to incentive structures and eligibility criteria.

2. Significant Breakthrough in India-UK FTA Negotiations: After months of protracted negotiations, officials have reported a "significant breakthrough" in the India-UK FTA talks. Confidential reports suggest that both sides have found common ground on contentious issues, including rules of origin for automotive parts and tariff reductions on Scotch whisky and British-made electric vehicles. In return, the UK is expected to offer more favourable terms for Indian textiles, agricultural products, and professional services visas. While a final agreement has not yet been signed, negotiators are optimistic that a deal could be concluded before the end of the fiscal year, potentially unlocking billions in bilateral trade.

3. JNPT Inaugurates Fully-Automated Container Terminal: In a major boost to India's logistics infrastructure, the Jawaharlal Nehru Port Trust (JNPT) today officially inaugurated its new, fully-automated container terminal. The state-of-the-art facility utilizes AI-powered cranes, autonomous vehicles, and a blockchain-based tracking system. Port authorities claim this will reduce vessel turnaround time by up to 30% and significantly decrease customs clearance delays. This development is a cornerstone of the National Logistics Policy, aimed at making Indian ports more competitive on the global stage.

4. Global Shipping Insurance Premiums Spike Amid Geopolitical Tensions: Leading maritime insurance syndicates in London have announced an average 15-20% hike in premiums for cargo traversing key global shipping lanes, particularly in the South China Sea and the Red Sea. The increase is attributed to heightened geopolitical instability and a series of minor but disruptive incidents in these regions. This will directly increase the landed cost of imports and the CIF (Cost, Insurance, and Freight) value of exports for Indian businesses, adding another layer of cost pressure in a volatile global market.

Implications for Indian Import-Export Professionals

Understanding these events is one thing; positioning your business to capitalize on them is another. Here are the direct implications and strategic considerations for your operations:

• PLI Scheme Review – An Opportunity to Engage: Exporters in the electronics and textile sectors should see this review as a window of opportunity. It's the perfect time to collate performance data and present a strong case through your industry associations for enhanced or more streamlined incentives. For those considering new manufacturing ventures, the potential expansion of the PLI scheme warrants close monitoring. Conversely, importers of finished goods in these sectors should anticipate a continued government push for domestic substitution, which could eventually translate into non-tariff measures.
• India-UK FTA – Prepare for a New Market Landscape: If your export basket includes textiles, auto components, or processed foods, now is the time to begin identifying potential distributors and partners in the UK. Research UK-specific standards and certifications. For importers, particularly of industrial machinery and luxury consumer goods, the potential tariff reduction could present an opportunity to source higher-quality products at more competitive prices. Prepare for increased competition from British brands in the domestic market.
• JNPT Automation – Re-evaluate Your Logistics Chain: The efficiency gains at JNPT are a tangible benefit. If you primarily use other western ports, it's time to conduct a cost-benefit analysis. The reduction in turnaround time at JNPT could lead to significant savings in demurrage and detention charges, potentially offsetting any increase in inland transportation costs. This development will put competitive pressure on other ports to accelerate their own modernization efforts.
• Rising Insurance Costs – A Direct Hit to Your Bottom Line: This is an immediate and unavoidable cost increase. You must immediately review your pricing models. For importers, the landed cost of your goods has just gone up. For exporters quoting on a CIF basis, your quotes need to be revised upwards to protect your margins. It is also crucial to engage with your freight forwarder and insurance provider to understand the nuances of the new risk profiles and explore any available mitigation strategies, such as alternative routing, though this may impact delivery times.

Conclusion: A Call for Strategic Agility

The developments of October 28, 2025, paint a vivid picture of the modern trade environment: a complex interplay of domestic industrial policy, bilateral trade diplomacy, infrastructure evolution, and unpredictable global risks. The winners will be those who demonstrate strategic agility. The PLI review and the UK FTA represent significant opportunities for growth, but they require proactive engagement and preparation. Simultaneously, the advancements at JNPT offer a path to greater efficiency, while rising insurance premiums serve as a stark reminder of the external pressures that can impact profitability. Indian import-export professionals must treat information as their most valuable asset, continuously adapting their strategies to not only weather the challenges but also to seize the immense opportunities that lie within this dynamic landscape.

Source: Original