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India Must Embrace Trade Reforms to Boost Global Competitiveness, Report Urges

A new report states India must prioritize trade openness and domestic reforms to unlock long-term competitiveness. Key recommendations include correcting duty structures, streamlining logistics, and fostering assembly-based manufacturing. The analysis comes alongside details of the interim US-India trade agreement, which involves reciprocal tariff concessions. The deal aims to boost Indian exports in labor-intensive sectors while integrating the country deeper into global value chains.

Key Points: India's Trade Reforms Key to Long-Term Competitiveness: Report

  • Correct inverted duty structures
  • Streamline logistics to cut costs
  • Foster assembly-based manufacturing
  • Reduce protectionism and expand FTAs
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India needs to prioritise trade openness, reforms to unlock long-term competitiveness: Report

A new report outlines priorities like reducing protectionism and expanding FTAs to elevate India's manufacturing and global standing amid the US trade deal.

"This integrated approach... can elevate India's manufacturing share and global standing - Systematix Report"

New Delhi, Feb 9

In the backdrop of the interim India-US trade agreement framework, India must prioritise trade openness and reforms to unlock long-term competitiveness, a new report showed on Monday.

These priorities are correcting inverted duty structures, streamlining logistics and customs to cut input costs, fostering assembly-based manufacturing for scale and employment and reducing protectionism, expanding FTAs, boosting R&D, and easing land/labour/skills constraints, according to a Systematix report.

"This integrated approach, disciplining firms through advanced manufacturing and embedding India deeper into GVCs, can elevate India's manufacturing share and global standing, mitigating the risks of Donald Trump's bargain while unlocking long-term competitiveness," the findings showed.

The US-India trade deal grants India tariff relief and deeper market access but binds it to a $500 billion import commitment and an oil ban.

The US-India Bilateral Trade Agreement (February 7, 2026) emphasises reciprocal market access, with India committing to eliminate or reduce tariffs on US industrial goods, food, and agricultural products like Distillers Dried Grains with Solubles (DDGS), red sorghum, tree nuts, fruits, soybean oil, wine, and spirits.

In return, the US sets an 18 per cent reciprocal tariff on select Indian goods (textiles, apparel, leather, plastics, chemicals, machinery), with plans to remove tariffs on items like generic pharmaceuticals, gems, diamonds, and aircraft parts upon successful Interim implementation.

From the US standpoint, this structure aims to balance trade while addressing American concerns over market barriers.

"From India's perspective, the deal provides tariff relief, reducing effective US duties on Indian exports to 18 per cent (below competitors' rates), which the Indian Trade Minister has stated will boost labour-intensive sectors and initiatives such as Make in India and Atmanirbhar Bharat," said the report.

It also ensures removal of national-security tariffs on Indian aircraft and parts, plus a preferential quota for automotive parts, supports aviation and manufacturing growth.

- IANS

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Reader Comments

P
Priya S
While trade openness is good, the $500 billion import commitment sounds massive. We must ensure our farmers and small manufacturers are not swamped by cheaper US agricultural and industrial goods. Atmanirbhar Bharat should mean building strength, not just opening floodgates. 🇮🇳
R
Rohit P
Finally some sense! Protectionism has held us back for decades. Look at Vietnam. They integrated into global supply chains and their exports boomed. We need to be competitive, not just protected. The focus on assembly-based manufacturing can create lakhs of jobs for our youth.
S
Sarah B
As someone working in the textile export sector, the 18% reciprocal tariff from the US is a mixed bag. It's lower than before, but still a cost. The real win is the removal of tariffs on generic pharma and gems later. That's where we have a strong edge.
V
Vikram M
The report talks about "easing land/labour/skills constraints" - this is the elephant in the room. Reforms are announced but implementation at the state level is a nightmare. Until we fix this, all these trade agreements will have limited impact on the ground.
K
Karthik V
Boosting R&D is the key point for long-term competitiveness. We can't just be an assembly floor forever. We need to move up the value chain. The deal should have stronger provisions for tech transfer and joint research initiatives, not just goods trade.

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