By Sanskriti Global Exports by Himanshu Gupta

India Trade Pulse: Navigating New Policies, FTA Hopes, and Tech-Driven Logistics

Date: 11 March 2025

Good morning, and welcome to your essential daily briefing. In the ever-shifting landscape of global commerce, staying ahead requires not just information, but incisive analysis. Today’s developments present a fascinating tableau of domestic policy ambition, diplomatic progress, and technological evolution that will directly impact every Indian importer and exporter. From a new Production Linked Incentive (PLI) scheme aimed at deepening our manufacturing capabilities to a significant breakthrough in the long-awaited India-EU Free Trade Agreement, the currents are moving fast. Let's delve into the details and unpack what they mean for your bottom line.

Today's Factual Summary

Our roundup today synthesizes key announcements and market intelligence from New Delhi to Brussels, providing a comprehensive overview for the Indian trade community.

1. Government Finalises 'PLI 3.0' for Green Hydrogen & Robotics: The Ministry of Commerce and Industry, in consultation with the NITI Aayog, has reportedly finalised the framework for the next phase of its flagship Production Linked Incentive scheme. Dubbed 'PLI 3.0', this phase will focus on high-potential, capital-intensive sectors including green hydrogen ecosystem components (electrolysers, fuel cells) and industrial robotics. The outlay is expected to be in the region of ₹25,000 crore over five years. The policy aims to reduce import dependency on critical technologies from China and Germany while positioning India as a global manufacturing hub for the green economy.

2. Major Breakthrough in India-EU FTA Talks on Rules of Origin: Sources close to the negotiations have confirmed a significant breakthrough in the India-European Union FTA discussions. The two sides have reached a provisional agreement on the crucial 'Rules of Origin' chapter, a long-standing point of contention. The agreement reportedly establishes a flexible framework that recognises Indian value-addition standards for key sectors like textiles, automotive components, and processed foods. While sensitive issues like agricultural tariffs and data localisation remain, resolving this technical chapter is being hailed as a major step towards concluding the landmark trade deal by the end of the year.

3. CBIC Launches 'Project SwiftClear' for AI-Driven Customs Assessment: The Central Board of Indirect Taxes and Customs (CBIC) has officially launched 'Project SwiftClear', a new AI-powered risk-management system at major ports like Nhava Sheva and Mundra. The system uses machine learning algorithms to analyse historical data, importer profiles, and shipment information in real-time to flag high-risk consignments for mandatory physical inspection. The stated goal is to reduce physical checks on low-risk 'green channel' cargo by up to 60%, significantly cutting down clearance times and port-related logistics costs for compliant businesses.

4. Pharmaceutical Exports Register 12% Y-o-Y Growth, API Imports Under Scrutiny: The latest data released by the Pharmaceuticals Export Promotion Council of India (Pharmexcil) shows a robust 12% year-on-year growth in finished formulation exports for the quarter ending December 2024. However, the report also highlights a continued, and growing, dependency on China for key Active Pharmaceutical Ingredients (APIs). In response, the Directorate General of Foreign Trade (DGFT) has initiated a review to assess the potential for imposing temporary import monitoring mechanisms or quality-based non-tariff barriers to encourage domestic API production, aligning with the broader PLI objectives.

Implications for Indian Import-Export Professionals

Understanding the news is one thing; translating it into strategy is another. Here are the key takeaways and actionable insights for your business:

• PLI 3.0 is a Dual Signal: For businesses in or adjacent to green energy and automation, this is a clear signal to explore domestic manufacturing and R&D opportunities. For importers of finished industrial robots or electrolyser components, this is a heads-up to anticipate a gradual shift in the duty structure over the next 18-24 months. Prepare for increased competition from domestic players and potentially higher import tariffs designed to protect them.
• EU-FTA - Get Your Paperwork Ready: The breakthrough on Rules of Origin means the FTA is moving from 'if' to 'when'. Exporters targeting the EU, especially in textiles, auto parts, and engineering goods, must immediately begin aligning their documentation and supply chain certification with potential EU standards. Proactively conducting a value-addition audit of your products will give you a significant first-mover advantage when the deal is signed.
• Leverage 'Project SwiftClear' with Compliance: The new AI customs system is a boon for importers with a strong compliance track record. To ensure you benefit from the 'green channel', double down on meticulous documentation, accurate HSN code classification, and timely filing. Any discrepancies could now be flagged more efficiently by the AI, potentially moving you from the green to the red channel. This system rewards operational excellence.
• Pharma Sector - Diversify Your API Sourcing: The DGFT's review of API imports is a clear warning sign. While a China-centric sourcing strategy may be cost-effective now, it carries significant policy risk. Importers of APIs should immediately begin exploring and qualifying alternate suppliers from other regions (e.g., Vietnam, Europe) or exploring partnerships with emerging domestic API manufacturers to de-risk their supply chain.
• Strategize for the 'Make in India' Ecosystem: Across all these points, a single narrative emerges: a concerted push to build domestic capacity and reduce import reliance in strategic sectors. Importers should re-evaluate their role. Can you pivot from simply importing finished goods to importing technology or raw materials for local assembly? Can exporters find new opportunities in supplying components to the large domestic champions emerging from the PLI schemes? The ecosystem is changing, and your business model must adapt.

Conclusion: A Confluence of Opportunity and Adaptation

Today's developments are not isolated events. They are interconnected threads in India's evolving trade narrative. The strategic push towards self-reliance through PLI 3.0, the opening of massive new markets via the EU-FTA, and the drive for efficiency through technological tools like Project SwiftClear all point to a more complex, but ultimately more rewarding, trading environment. The path forward for Indian import-export professionals lies in agility—the ability to pivot sourcing strategies, the foresight to prepare for new market access, and the commitment to operational compliance. The winners in this new era will be those who don't just react to the headlines, but proactively strategize around them.

Source: Original