The emerging uncertainties in the global economy emerging especially after President Donald Trump took charge of the Oval Office has found several reverberations in Ms Nirmala Sitharaman’s 8th budget.

India’s merchandise exports are already experiencing severe headwinds even before President Trump’s trade disruptive proposals begin to be implemented, growing by less than 2 per cent growth in the first nine months of the current fiscal. With imports increasing by over 5 per cent during the same period, India is facing a 11 per cent higher merchandise trade deficit as compared to the April-December period in the previous year.

The government has shown its awareness about the need to promote Indian businesses in the international market and has, therefore, identified the export sector as one of the four powerful engines are driving the country’s development.

The Economic Survey had pointed to the slowing of global trade due to the changing nature of market access barriers and that non-tariff measures (NTMs) have been becoming increasingly important.

These measures have appeared in various forms, including product and process standards, including those imposed on food safety considerations and for the protection of environment, among others.

The NTMs have been used to protect markets against imports, steadily replacing tariffs, in both developed and developing countries. Though the importance of the NTMs has increased manifold over the past two decades, India’s trade policy makers have been very slow to respond. Tariffs have remained the central focus due to which very little efforts have been made in the country to prepare the domestic businesses for meeting the new challenges in the global market.

This lack of preparedness to respond to NTMs has been a major factor preventing India from taking advantage of the market openings that have been offered to the exporters through the free trade agreements (FTAs). In its the FTAs with the East Asian countries, India has been running significantly high trade deficits due the inadequacies of the country’s businesses to overcome the NTMs. The government needed to take the initiative to establish institutions and facilities that could be used by the private sector to improve their preparedness towards the burgeoning NTMs.

The first systematic initiative towards this end has been announced in the 2025-26 Budget. The government has decided to set up an Export Promotion Mission that would support to MSMEs to tackle non-tariff measures in overseas markets. This Mission, which will have sectoral and ministerial targets,driven jointly by the Ministries of Commerce, MSME and Finance, will also facilitate easy access to export credit, cross-border factoring support.

Since the end of the 20th Century, global trade in most major sectors have been driven by global value chains. Indian businesses have taken efforts to be part of these value chains in order to increase their presence in the global markets, but they have not been very successful. The new budget has proposed that global trade.

Support will be provided to develop domestic manufacturing capacities so as to ensure better integration with the global supply chains. While it has been indicated that sectors will be identified based on objective criteria, it must be emphasised that this exercise should be carried out in right earnest to ensure prompt results.

A proposal made the budget in this regard is that facilitation groups with participation of senior officers and industry representatives will be formed for select products and supply chains. This is the most vital part of the initiative for it would allow the government to take appropriate measures in keeping with the needs of the industry.