India Strengthens Domestic Industry Amid Global Trade Challenges

Commerce Ministry Reaffirms Commitment to Domestic Industry Amid Global Trade Volatility

Against a backdrop of escalating global trade uncertainties, the Ministry of Commerce and Industry has reiterated its pledge to safeguard the interests of India’s domestic manufacturing and export sectors. This announcement comes at a time of heightened concern over international tariff policies and unstable trading conditions that have direct implications for Indian producers, exporters, and small enterprises.

Government Response to International Tariff Pressures

Recent developments in global trade policy, including the imposition of steep tariffs by major trading partners, have drawn urgent attention in New Delhi. The Indian government has responded by reiterating its resolve to pursue fair and reciprocal agreements while defending the country’s economic interests. The Commerce and Industry Ministry, responding specifically to new tariff pronouncements from key trading nations, stated that authorities are carefully “studying [the] implications” of such moves for Indian industry.

A Ministry spokesperson emphasized ongoing negotiations to reach “a fair, balanced and mutually beneficial bilateral trade agreement,” underlining that the government places special importance on “protecting and promoting the welfare of India’s farmers, entrepreneurs, and MSMEs” (Micro, Small and Medium Enterprises). This approach is designed to ensure that Indian sectors critical to employment generation and export strength are not adversely impacted by sudden shifts in the global trading environment, particularly when those shifts involve heightened or punitive market access barriers.

“The government had taken note of [the] statement and was studying its implications... negotiations aim at concluding a fair, balanced, and mutually beneficial bilateral trade agreement, prioritizing the welfare of India’s farmers, entrepreneurs, and MSMEs,”

—Commerce and Industry Ministry communication on trade negotiations

Strategic Administrative Measures to Protect Indian Industry

In continuation of policy adjustments responsive to global trends, the government seeks to reinforce existing support frameworks for domestic industry. The Ministry of Steel, for example, notified a revised policy in late May 2025 that gives preference to domestically manufactured iron and steel products in government procurement. This initiative, while sector-specific, exemplifies the broader policy pattern being followed by Indian authorities. The intent is to channel both policy incentives and regulatory protections toward domestic producers, thus insulating them to a certain degree from international price volatility and trade restrictions.

Such policies directly align with the goals of “Atmanirbhar Bharat” (self-reliant India), furthering import substitution and boosting indigenous value addition. Manufacturing units, particularly in sectors like textiles, engineering goods, and electronics, have been encouraged to upgrade quality standards and productivity, enabling Indian products to remain competitive on the world stage even as external market conditions fluctuate.

Support for Exporters and MSMEs

The Commerce and Industry Ministry has laid special emphasis on the MSME segment, which constitutes a significant share of Indian exports and domestic employment. In light of evolving trade risks, the government continues to implement schemes focused on:

• Financial support mechanisms such as export credit facilities
• Market access assistance for Indian exporters entering new geographies
• Capacity building programmes for product quality, packaging, and compliance with foreign standards
• Export insurance schemes to protect against payment and delivery risks

Ministry officials have also signaled readiness to invoke suitable safeguard measures as and when required, leveraging World Trade Organization (WTO) provisions to shield vulnerable industries from injurious competition and unexpected surges in imports. The ongoing review and adjustment of Free Trade Agreements (FTAs) reflects India’s intent to ensure that such accords genuinely facilitate two-way trade while preserving essential protections for domestic producers.

Recent Policy Announcements: Steel Sector Reference

The government’s commitment was further illustrated by a revised policy notification in late May 2025 on Domestically Manufactured Iron & Steel Products (DMI&SP). The policy mandates preferential treatment to locally produced iron and steel in government procurement, with a view to bolstering Indian steelmakers vis-à-vis cheap or subsidized imports. The Ministry of Steel has underscored that this move intends to foster job creation, sustain domestic investment, and anchor supply chains within India’s industrial ecosystem.

The DMI&SP policy is structured to cover a wide range of central and state government projects, requiring that a defined percentage of procurement be sourced from Indian producers. This effort not only provides a buffer against abrupt changes in external supply but also incentivizes domestic industries to scale up capacity, improve quality, and pursue greater export orientation.

Sector-Specific Measures: Safeguarding Electronics, Textiles, and Engineering Goods

Other critical manufacturing sectors have also seen targeted interventions:

• Electronics: Production-linked incentive (PLI) schemes continue to support the establishment of new manufacturing units and expansion of existing operations, especially in semiconductors, mobile devices, and critical components. Incentives aim to reduce import reliance and increase India’s share in global electronics exports.
• Textiles: The government has emphasized value-added exports, cluster development, and the promotion of Indian branding through various sector-focused programmes.
• Engineering Goods: Initiatives are in place to help exporters meet stringent foreign technical standards and certification requirements, thereby reducing trade friction and improving access to markets in North America, Europe, and East Asia.

Export Promotion Councils and Trade Facilitation

The Ministry continues to support the work of Export Promotion Councils (EPCs) and trade facilitation agencies, ensuring real-time dissemination of regulatory changes, foreign market trends, and compliance advisories. Government departments work in close coordination with industry associations to monitor the impact of foreign trade measures, flag sectoral distress, and prepare timely interventions.

Efforts have also been made to enhance digital platforms for regulatory filings, approvals, and export benefit disbursement, streamlining processes and reducing the compliance burden—especially for smaller exporters. Digital trade facilitation, including the expansion of e-commerce and export logistics infrastructure, remains high on the Ministry’s agenda.

Consumer Protection and Fair Trade Practices

Protection of domestic manufacturing also dovetails with broader consumer protection goals. The Department of Consumer Affairs recently notified strengthened rules under the Consumer Protection (E-Commerce) Rules, 2020, emphasizing the accountability of both domestic and foreign e-commerce entities operating in India. These provisions aim to guarantee that consumers are shielded from unfair trade practices and have recourse in cases of defective, counterfeit, or misrepresented goods.

In addition, major e-commerce companies have signed a “Safety Pledge,” committing voluntarily to uphold product safety and consumer rights, echoing the government’s intent to balance trade openness with the preservation of standards and trust for Indian buyers. The Central Consumer Protection Authority (CCPA) remains authorized to prevent and address misleading advertisements—an issue of growing significance as online trade expands.

Engaging with Global Value Chains and Trade Partners

The volatile global environment has strengthened India’s resolve to diversify its trading partnerships and integrate more deeply with alternative value chains. India continues bilateral and plurilateral trade discussions with both traditional partners and emerging markets, focusing on customs facilitation, mutual recognition of standards, and the removal of non-tariff barriers where possible.

Recent tariff escalations on Indian exports in certain markets have been met with measured diplomatic and technical responses. While reiterating respect for the rules-based global order, officials have reaffirmed that negotiations will not compromise core Indian interests or the viability of crucial domestic sectors.

Stakeholder Consultations and Policy Feedback Mechanisms

Recognising the diversity of Indian industry, the Commerce and Industry Ministry regularly convenes consultations with stakeholders, including industry chambers, sectoral associations, state governments, and export councils. These dialogues play a vital role in shaping policy responses and in calibrating administrative interventions that reflect on-the-ground realities experienced by producers and exporters.

The Ministry has committed to data-driven monitoring of global trade flows, domestic production trends, and export bottlenecks. Stakeholder inputs support early identification of sectoral risks that may arise from sudden global shocks, informing swift policy action.

Forward Outlook: Building Resilience and Competitiveness

The Ministry’s reaffirmed intent is ultimately aimed at strengthening India’s resilience and industrial competitiveness in the face of external disruptions. Defensive measures are balanced by a parallel focus on capacity building, technology adoption, and global market engagement.

Programs to encourage innovation, investment in manufacturing infrastructure, and workforce skill development are being scaled up, in recognition that long-term export success rests on sustained productivity and adaptability. The Ministry continues to advocate for an enabling business environment that facilitates not just survival amid global headwinds, but sustained growth and leadership for Indian manufacturers and exporters on the world stage.

Conclusion

The Commerce and Industry Ministry’s statement underscores the Indian government’s multidimensional approach to protect domestic manufacturing and exports, involving both immediate responses to external shocks and deeper, structural reforms. This approach includes targeted policy interventions, close stakeholder engagement, and a sustained focus on market development and product quality.

As global markets undergo frequent and sometimes unpredictable shifts, Indian authorities have made it clear that protection of domestic enterprise, balanced with international cooperation and compliance, will remain the cornerstone of the country’s trade and industrial strategy.