Industry Bodies Highlight Rising Costs, Trade Barriers and Supply Chain Disruptions

Exporters and industry organisations on Friday informed a parliamentary committee that US tariffs and trade barriers have affected several sectors in India, while the ongoing West Asia crisis has added pressure through higher logistics and insurance costs. Industry representatives also stressed the importance of concluding the proposed bilateral trade agreement (BTA) between India and the United States.

Exporters and industry bodies on Friday told a parliamentary committee that US tariffs and trade barriers have severely affected key sectors in India. They stated that the continuing West Asia crisis has led to increased freight costs, longer shipping time and higher insurance expenses, along with supply chain delays and pressure on export margins.

The submissions were made before the Parliamentary standing committee on commerce, led by Trinamool Congress MP Dola Sen.

Industry representatives said the proposed bilateral trade agreement (BTA) between India and the United States was important for ensuring “long-term trade predictability”.

The Federation of Indian Export Organisations (FIEO), in its note to the panel, stated that the future trajectory of India-US trade relations would depend significantly on the successful conclusion of a balanced BTA, greater stability in US trade policy, India’s manufacturing competitiveness, continued supply-chain diversification away from China and geopolitical stability in West Asia and Eurasia.

FIEO further stated that India-US trade relations are entering a phase characterised by both strategic cooperation and transactional trade bargaining. It added that sectors including engineering goods, steel and aluminium, textiles, auto components and pharmaceuticals have been affected by lack of predictability in US trade policy, frequent tariff reviews, product reclassification risks, non-tariff barriers and tighter rules-of-origin scrutiny.

The Confederation of Indian Industry (CII) also informed the panel that the US investigation into “Structural Excess Capacity & Production” targeting 16 major economies could result in higher tariffs on sectors such as textiles, foundry products, solar manufacturing, automotive and auto components, and steel.

India-US bilateral trade has continued to expand despite periodic trade disputes and policy frictions. Bilateral merchandise trade crossed approximately $140 billion during FY26 compared to around $132 billion in FY25 and $119.7 billion in FY24.

TMC MP Dola Sen said the committee will travel to Ahmedabad, Raipur and Odisha to meet stakeholders from the affected industries. She also stated that the skill development industry has been asked to provide data on placement after training.