Tag: International Trade

US tariffs on India

India’s Export Outlook in Light of U.S. Tariffs

Insights | August 2, 2025 | Practice Area: , ,

The recent announcement by U.S. President Trump regarding a 25% tariff on Indian exports, along with additional penalties linked to India’s continued defence and energy transactions with Russia, has introduced significant uncertainty into bilateral trade relations. The executive order formalizing adjusted reciprocal tariff rates is expected to affect a wide range of countries and Indian export sectors, including gems and jewelry, textiles, marine products, automotive components, electronics, and processed foods. While pharmaceuticals appear exempt for now, broader economic consequences such as currency volatility and pressure on small and medium enterprises are anticipated. The strategic linkage of trade penalties to India’s sovereign procurement decisions raises complex legal questions under World Trade Organization rules and may prompt India to consider both diplomatic and legal avenues for redress. As negotiations toward a bilateral trade agreement continue, India faces the challenge of balancing its geopolitical autonomy with the need to maintain stable access to key export markets.

cape town convention

The Cape Town Convention: Its Application and Benefits in India

Insights | July 2, 2025 | Practice Area: , , , ,

S&R Associates and Stewarts are pleased to present their co-authored note on the Cape Town Convention.
India’s new Cape Town Convention act enforces global rules for aircraft financing, boosting investor confidence and lowering leasing costs. It streamlines repossession in insolvencies and aligns India’s aviation laws with international standards, encouraging growth and efficiency. The reform is set to attract foreign lessors and benefit passengers with better service and pricing.
This note discusses the implications and expected benefits of the Protection of Interests in Aircraft Objects Act 2025, which gives legal effect from May 1, 2025 to the Convention on International Interests in Mobile Equipment (known as the “Cape Town Convention” and referred to here as the “CTC” or the “Convention”) and the Protocol to the Convention on Matters Specific to Aircraft Equipment (the “Protocol”), which were adopted on December 16, 2001 in Cape Town, South Africa.
The Convention entered into force on April 1, 2004 and is applied to different sectors through individual protocols, one of which is the Protocol, which entered into force on March 1, 2006.

opportunities in Indian defence sector

New Opportunities in India’s Defence Sector

Insights | June 30, 2025 | Practice Area: , , , ,

Recent geopolitical dynamics, regional conflicts and related national security concerns have made the Indian defence sector ripe for additional growth and investment. As technologies evolve and new forms of warfare emerge, this growing sector is likely to witness further transformation. India’s proposed reform measures in the defence industry, together with rising domestic demand and increased focus on self-reliance, indigenization and exports; emerging technologies and technology transfers, innovation and R&D; as well as strategic international partnerships with global OEMs and key allies, are likely to provide new opportunities for private and foreign participation in the sector.
This note provides a broad overview of India’s defence industry and proposed reforms, including with respect to new defence technologies, the startup ecosystem, and international collaborations; the ease of doing business and FDI; defence acquisition procedures and recent budgetary allocation trends; along with the export of dual-use items and production-linked incentive schemes for the defence sector.

reciprocal tariffs

Reciprocal Tariffs: What Can India Expect?

Insights | March 31, 2025 | Practice Area: ,

The recent announcement of reciprocal tariffs by the U.S. government, aimed at addressing trade imbalances and reinforcing domestic economic security, marks a significant shift in global trade policy. As India remains a key trading partner of the U.S., these tariffs are expected to reshape bilateral trade dynamics and may pose challenges for Indian exporters.
With the U.S. being India’s biggest export market, sectors such as engineering goods, pharmaceuticals, and electronics may face potential disruptions. To mitigate the impact and safeguard economic interests, the Indian government has undertaken strategic measures, including tariff reductions and negotiations for a Bilateral Trade Agreement (BTA).
This note examines the implications of the U.S. reciprocal tariff regime for India, assesses the government’s response, and outlines potential strategies to navigate the evolving trade landscape.

Carbon Border Adjustment Mechanism

Implementation of the EU’s Carbon Border Adjustment Mechanism and its Implications

Insights | January 9, 2025 | Practice Area: , , , , ,

The European Union’s Carbon Border Adjustment Mechanism (“CBAM”), applicable to imports from ‘third countries’ (i.e., non-EU countries), endeavors to impose a price on emissions in respect of the production and supply of carbon-intensive goods. By ensuring that a price is paid for such embedded emissions, the CBAM aims to make the carbon price of imports equivalent to that of domestic production, especially when third countries do not appropriately impose such price.
Although the CBAM has been mainly presented as a climate measure, it may also end up operating as a unilateral trade restriction designed to protect EU manufacturing. Several countries, including India, have labeled the CBAM as protectionist. While the global implications of the CBAM appear to be diverse, certain countries, including developing and newly industrialized nations, have claimed to be the worst hit, while developed countries are likely to have less carbon-intensive production processes.
The CBAM’s compliance requirements are expected to reduce the profits of Indian exporters in key sectors. Indian manufacturers from key trade-exposed industries (including those that are energy-intensive) are further poised to incur an increase in fuel costs, leading to a decrease in export earnings.
While India has discussed retaliatory measures, it is also pursuing the option of getting its Carbon Credit Trading Scheme, 2023 recognized by the EU and aligning it with the CBAM. Separately, the EU and India are engaged in talks on a proposed Free Trade Agreement, where India has raised concerns about the CBAM being similar to non-tariff barriers.
However, consistent with India’s own goals, the CBAM could also offer potential synergies, including in terms of green hydrogen partnerships and increased renewable energy deployment. Indian producers and exporters could view the CBAM as an opportunity to scale up sustainability-driven practices, including to enhance their positioning in a globally competitive market. Going forward, while carbon reporting and emissions monitoring will be essential, Indian companies should also consider investing in appropriate R&D, including with respect to emerging technologies.

carbon taxes

Proactive Pathways to Navigate Emerging Carbon Taxes

Insights | December 11, 2024 | Practice Area: , ,

The global focus on mitigating climate change has spurred the swift development and implementation of policies aimed at curbing greenhouse gas emissions. Among these measures, carbon taxes and mechanisms such as the European Union’s Carbon Border Adjustment Mechanism (“EU CBAM”) have emerged as pivotal tools for integrating environmental accountability into global economic activities. These policies are poised to bring substantial changes to the dynamics of international trade.

For Indian exporters, particularly those in carbon-intensive sectors like iron and steel, cement, fertilizers, aluminum, electricity, and hydrogen, the EU CBAM represents both a challenge and an opportunity. While the regulation primarily imposes compliance obligations on EU importers, Indian businesses must act swiftly. The need to monitor evolving CBAM regulations, forecast financial impacts, optimize supply chains, and establish robust governance frameworks has never been more critical.

This note delves into the framework of the EU CBAM, examines its implications for Indian exporters, and highlights practical strategies businesses can adopt to navigate this shift towards a carbon-conscious trade landscape.