What specific trade barriers are the US and EU targeting in India?

The US and EU cited multiple concerns including: unpredictable customs procedures, Quality Control Orders (QCOs) with burdensome domestic standards, sanitary and phytosanitary (SPS) measures, gaps in intellectual property protection, reduced access to government procurement, barriers to digital trade and services (including localisation norms in ICT goods, spirits, and medical devices), and restrictions on foreign participation in insurance and legal sectors.

How could these trade barriers impact global supply chains connected to India?

Non-tariff barriers and regulatory inconsistencies increase compliance costs, extend lead times for customs clearance, and create unpredictability in operations. Companies may need to maintain higher inventory buffers, delay product launches, or consider alternative sourcing locations, particularly for sectors like pharmaceuticals, ICT goods, and agricultural products that face heightened scrutiny.

What is the India-EU free trade agreement and does it address these concerns?

The India-EU FTA was concluded in January 2026 and aims to eliminate or reduce tariffs on 96.6% of traded goods by value. It includes ambitious provisions to address non-tariff barriers, but the agreement still awaits ratification. The EU emphasized that implementation on the ground will be critical to ensure the agreed-upon rules deliver concrete benefits to traders.

What is India's position on these trade complaints?

India defended its regulatory framework, arguing that SPS measures and QCOs are designed to facilitate legitimate trade while protecting public health, food safety, biosecurity, and the environment. India acknowledged that a reform process has begun following a NITI Aayog High-Level Committee report on QCOs, signaling willingness to modify some practices.

Why does this WTO review matter now?

With the India-EU FTA pending ratification and bilateral trade relationships shifting (China now exceeds the US as India's largest trading partner at $151.1 billion versus $129 billion with the US), the WTO review's outcome could determine whether India aligns with international standards or maintains protectionist barriers. This will directly affect market access for exporters and supply chain design for multinational companies.

Trade Policy & Tariffs

High Impact

US, EU Challenge India's Tariffs and Trade Barriers at WTO

Oct 28, 2026

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The signal

The United States and European Union have formally challenged India's trade policies during the country's eighth Trade Policy Review at the WTO, citing tariffs, unpredictable customs procedures, and non-tariff barriers that could limit global supply chain integration. Specific concerns include India's expanded use of Quality Control Orders (QCOs) based on domestic standards rather than international norms, sanitary and phytosanitary (SPS) measures, and barriers to digital trade and services sectors.

India defended its regulatory framework as necessary to protect public health and biosecurity, though it acknowledged that reform efforts are underway following recommendations from a NITI Aayog committee. The dispute carries significance for multinational enterprises with operations in or trading with India, as the recently signed India-EU free trade agreement (which aims to eliminate tariffs on 96.6% of traded goods) awaits ratification and may serve as a test case for whether India will align its regulatory practices with international standards.

How this affects:

Union Pacific Railroad

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#digital-trade-restrictions

#customs-procedures

#supply-chain-compliance

#trade-agreement-implementation

Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

this month

What if India implements stricter QCO standards across all imports?

Simulate the impact of India expanding Quality Control Order requirements to all product categories with heightened domestic standards that deviate further from international norms. Model increased customs clearance times (add 7-14 days), higher compliance costs (add 3-5% to import costs), and reduced supplier reliability for companies exporting ICT goods, medical devices, and agricultural products to India.

Run this scenario

Simulation Suggestion

this month

What if India implements digital localisation requirements sector-wide?

Simulate India expanding digital localisation norms across all ICT services and goods sectors, requiring data storage and processing infrastructure to be located within India. Model supply chain impacts including: rerouting of digital services operations, increased infrastructure investment requirements, longer lead times for digital product deployment, and potential service disruptions for multinational tech companies and software exporters.

Run this scenario

Simulation Suggestion

strategic

What if India-EU FTA ratification fails or is delayed?

Model the scenario where the India-EU FTA remains unratified beyond mid-2026, meaning tariff reductions on 96.6% of goods do not materialize. Assume current tariff levels persist for EU goods, and regulatory alignment initiatives stall. Forecast increased sourcing diversification away from India by EU companies, potential cost increases for EU importers of Indian goods, and delayed market integration benefits.

Run this scenario

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