Export Bottlenecks: States Flag Testing and Logistics Gaps

Export Bottlenecks in India Latest News

• Beyond high US tariffs, India’s goods exports are being hit by costlier raw materials, a shortage of testing facilities to meet global quality standards, and inadequate availability of shipping containers, the Union Commerce and Industry Ministry said in response to an RTI application.
• These concerns were raised by exporters at a Board of Trade meeting chaired by Commerce and Industry Minister Piyush Goyal on November 25, 2025.

Board of Trade(BoT)

• The Board of Trade (BoT) is an advisory body under the Ministry of Commerce & Industry, chaired by the Commerce Minister. 
• It serves as a key forum for shaping India’s Foreign Trade Policy (FTP) by bringing together the Centre, States, industry, and trade bodies.
• The Board of Trade acts as a bridge between policy and practice, ensuring that trade policies reflect ground realities and support export growth across regions and sectors.

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Composition of the BoT

• Chair: Minister for Commerce & Industry
• Members: Government officials, trade experts, and representatives from:
  • Export Promotion Councils
  • Chambers of Commerce and Industry
  • Financial and trade institutions such as SBI, ECGC, and EXIM Bank

Backdrop: US Tariffs and Stalled Trade Talks

• The BoT meeting took place amid slowing exports, driven by steep US tariffs of 50% and the failure of India and the United States to conclude a trade deal by fall 2025.
• India had been among the first countries to initiate trade talks after PM Modi visited Washington in February 2025.
• The tariffs, which came into effect on August 27, 2025, led to order cancellations, delayed payments, and fears of export diversion to competitors such as Bangladesh, Vietnam, and China.

Export Trends and Sectoral Impact

• Exports declined in October but rose 19% in November, driven by products outside the tariff net.
• Labour-intensive sectors such as garments and footwear face the risk of losing market share as shipments are increasingly replaced by competitors.
• Rajasthan reported that US tariffs led to order cancellations in the gems and jewellery sector, along with delayed payments.
• Spices Board: Flagged a crisis due to a 50% US duty on oleoresin, a key input for flavour and aroma in food products.
• Pharmaceuticals: Despite generic drugs being excluded, Goa highlighted that pharma exports were still affected by tariffs.
• Seafood: The Seafood Exporters Association reported a significant drop in exports to the US.

India’s Strategy

• To offset pressure from the US market, New Delhi is actively pursuing new markets. 
• In 2025, India signed three free trade agreements with Oman, New Zealand, and the United Kingdom, signalling a push towards export diversification.

Anti-Dumping and Countervailing Duties

• Beyond tariffs, exporters raised concerns over anti-dumping duties:
  • Gujarat expressed apprehension over export losses due to US anti-dumping actions.
  • Spices Board highlighted issues arising from anti-dumping and Countervailing Duties (CVDs).
• Although the United States has initiated most anti-dumping investigations against China, it has launched nine probes against Indian industrial exports since July last year, including:
  • Hexamine
  • Oleoresin paprika
    • Oleoresins help manufacturers achieve flavour and aroma in their final products.
  • Certain freight rail couplers
  • Overhead door counterbalance torsion springs

Other Major Bottleneck

• Assam flagged hurdles in tea exports due to shipping line levies on empty containers, given the state’s landlocked geography.
• Gujarat also highlighted a shortage of shipping containers, affecting exporters across sectors.

Lack of Testing Facilities

• Rajasthan noted that export samples are sent to Surat and other states due to the absence of local testing labs.
• Uttarakhand reported no testing labs, forcing exporters to rely on facilities in Uttar Pradesh.
• Labour-intensive sectors stressed that inadequate testing capacity leads to delays and higher costs.
• There is need for more labs accredited by the Marine Products Export Development Authority and National Accreditation Board for Testing and Calibration Laboratories.
  • This is due to insufficient capacity with the Export Inspection Council.

Access to Inputs and High Cost Pressures

• MSME representatives stated that domestic raw material prices are 15–20% higher than international levels.
• Textile exporters highlighted energy costs for spinning and manufacturing being 15–20% higher, seeking compensation or relief.

Regulatory and Compliance Burdens

• Exporters pointed out that Bureau of Indian Standards (BIS) norms are being applied even for exports to the US and EU, despite differing standards—raising compliance complexity and costs.
• MSMEs flagged difficulties with Quality Control Orders (QCOs), seeking a more facilitatory inspection approach.

Sector-Specific Issues

• The Gem and Jewellery Export Promotion Council (GJEPC) raised concerns over restrictions on gold, platinum, and silver, seeking an automatic import route where duty benefits are unavailable; restrictions have made component imports costlier.
• Ceramics industry representatives noted that District Export Committees are not meeting regularly and need better monitoring.

Source: IE | NDTVP