Predictable and Lower Tariffs
At the top of the list for nearly every Indian exporter is the need for a predictable and favourable tariff structure. The period of trade friction, which saw the US impose significant tariffs in 2025, created immense uncertainty. While a framework agreed
in early 2026 reduced the rate to 18%, Indian industry leaders are pushing for terms that give them a competitive edge over rivals from countries like Vietnam and Bangladesh. A key, long-standing demand is the restoration of the Generalized System of Preferences (GSP) program, which previously allowed duty-free entry for thousands of Indian products and was a significant boon for small and medium-sized enterprises (SMEs).
Dismantling Non-Tariff Barriers
Beyond tariffs, Indian businesses face significant hurdles from non-tariff barriers (NTBs). These are complex regulations and standards that can be more challenging to navigate than simple duties. For agricultural and food exporters, this includes stringent sanitary and phytosanitary (SPS) measures. For manufacturers of engineering goods and electronics, it involves navigating complex Technical Barriers to Trade (TBT). Exporters are asking for these processes to be made more transparent, consistent, and streamlined. The goal is to reduce the delays and costs associated with compliance and prevent these rules from being used as a form of protectionism.
A Balanced Approach on Data and Digital Trade
The digital economy is a critical new frontier in trade negotiations. The US is advocating for the free flow of data across borders and rules against data localization, where companies are required to store Indian data within the country. However, this is a sensitive area for India. Indian enterprises, backed by the government, are keen to protect data sovereignty. While open to digital trade, they are looking for a framework that respects India's regulatory authority and provides a level playing field for domestic technology companies, rather than a blanket adoption of US-led standards without clear benefits. This remains a key sticking point in wider Indo-Pacific Economic Framework (IPEF) discussions.
Streamlined Pharmaceutical Approvals
India is a powerhouse in the global pharmaceutical industry, often called the 'pharmacy of the world', and the US is its most significant market for generic drugs. Indian pharma companies require a more efficient and predictable approval process from the US Food and Drug Administration (FDA). This includes faster inspections of Indian manufacturing facilities and quicker turnaround times for drug approvals. Any delays or regulatory hurdles can have a major impact on revenue and supply chains, making this a critical area for negotiation to ensure Indian generics can continue to reach the US market effectively.
Fair Standards for Labour and Environment
Newer trade frameworks, such as the IPEF, place a strong emphasis on labour rights and environmental standards. While Indian enterprises are not opposed to these principles, they are cautious. There is a significant concern that overly stringent standards could be used as a protectionist tool, raising compliance costs to a point where Indian goods, particularly from labour-intensive sectors like textiles, become uncompetitive. Therefore, India is seeking a balanced agreement that promotes fair practices without creating new barriers to trade or penalizing developing economies' manufacturing bases.
