India’s Foreign Trade and Export-Import Policy amid Global Disruptions
April 2, 2026 — Economic Times
India is recalibrating its foreign trade policies in response to ongoing global uncertainties, particularly the repercussions of the war in Iran. The government is set to lower import duties and impose export restrictions to ensure the stability of domestic supply chains, signaling a strategic pivot towards national resilience and economic self-reliance.
Securing Domestic Supply through Duty Adjustments and Export Controls
A senior trade official announced that policymakers are actively exploring tariff reductions coupled with export curbs, aiming to protect critical domestic industries from international supply disruptions triggered by the conflict in West Asia. This proactive stance includes not only tariff tweaks but also diversifying import sources to reduce the dependency on unstable regions.
Impact on Key Commodities: Edible Oils and Petrochemicals
In March 2026, India’s edible oil imports, particularly palm oil, dropped sharply to a three-month low, plunging by 19% due to surging global prices. While imports of soyoil experienced a slight decline, sunflower oil shipments increased, indicating shifts in import preferences based on cost and availability.
Simultaneously, India has temporarily waived import duties on vital petrochemical products such as ammonium nitrate, methanol, and PVC for a three-month period starting April 2. This waiver also includes exemption from the Agriculture Infrastructure and Development Cess on ammonium nitrate, aiming to alleviate supply bottlenecks and reduce input costs for industries reliant on these chemicals.
Exporters Receive Support Amid Trade Volatility
To counteract trade disruptions induced by geopolitical tensions in West Asia, the government has extended the Remission of Duties and Taxes on Exported Products (RoDTEP) benefits until September 30, 2026. This extension provides exporters refunds on certain duties and taxes, helping to offset rising freight expenses and manage geopolitical risks.
Moreover, goods produced in Special Economic Zones (SEZs) and sold within the domestic market will enjoy temporary customs duty relief with reduced rates ranging from 5% to 12.5%, effective for one year from April 1, 2026. This policy supports SEZ producers who commenced operations by March 31, 2025, by easing cost burdens and encouraging domestic sales.
Trade Relations and Strategic Partnerships
India’s bilateral trade cooperation continues with neighboring Maldives through approved exports of essential goods such as eggs, rice, sugar, and construction materials for 2026-27. This ensures uninterrupted supply supporting Maldives’ economic growth, particularly its construction sector.
Further strengthening strategic autonomy, the government is developing dedicated rare earth corridors in states like Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. These corridors will integrate mining, processing, research, and manufacturing activities, reducing import dependence on critical minerals and aligning with India’s net-zero emissions targets.
Challenges from International Trade Partners
Meanwhile, India faces scrutiny from the United States, which has identified several policy areas—such as restrictions on US payment firms in India’s UPI system, data localization mandates, and high tariffs on agricultural products—as trade barriers. Negotiations for an interim trade agreement remain underway to address such concerns and facilitate smoother trade flows.
Boosting E-commerce and Logistics Efficiency
In a significant regulatory update from April 1, India removed the ₹10 lakh threshold on courier exports. This move is expected to accelerate e-commerce growth by easing restrictions for small businesses, while a newly introduced mechanism for the swift return of unclaimed parcels will help reduce delays in cross-border shipments.
Looking Ahead
India’s dynamic response to external shocks—via tariff reforms, export controls, and strategic industry support—reflects its commitment to safeguarding economic stability while fostering self-sufficiency. As global uncertainties persist, the government’s multi-pronged approach aims to maintain supply chain resilience, promote export competitiveness, and strengthen trade partnerships.
For continuous updates on India’s economy, foreign trade policy, and market developments, stay tuned to the Economic Times.
Reported by Economic Times, April 2, 2026