The United States (US) and the European Union (EU), India’s two largest trading partners, have flagged a range of regulatory and non-tariff barriers that they say are undermining the benefits of India’s efforts to open its economy and integrate with global supply chains.
The concerns, raised during discussions on India’s eighth trade policy review at the World Trade Organization (WTO), include high tariffs, norms meant to protect human, animal and plant health known as sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBTs), quality-control orders, restrictions on services and digital trade, local-content requirements and barriers to government procurement.
The WTO’s trade policy review (TPR) is essentially a peer review of a country’s trade policies. The WTO Secretariat and the country under review prepare separate detailed reports on its trade policies and priorities.
Other WTO members study the reports and submit written questions, seeking explanations for specific tariffs, regulations and other trade barriers. At the review meeting, members raise these issues, while the country responds and explains its policies. India undergoes a TPR once every five years.
“While we are encouraged by the Indian government’s pursuit of trade agreements that will foster transparency and good regulatory practices, India must take additional steps to significantly reduce tariffs, remove unjustified SPS and TBT measures, refrain from imposing barriers to services and digital trade, and roll back regulations that discriminate against foreign exporters and investors,” the US said in its statement, which forms part of the minutes of the latest review available from the WTO.
The European Union raised concerns over what it described as unpredictable customs procedures, cumbersome SPS requirements, gaps in protection of intellectual property rights and geographical indications, and narrowing access to government procurement.
The EU also singled out India’s growing use of Quality Control Orders (QCOs), saying these were creating burdensome conformity-assessment requirements based on domestic standards that deviate from internationally agreed standards. “This risks increasingly insulating the Indian market from the world’s economy and reversing the economic progress that we saw over the last years,” it said.
The EU, however, acknowledged that India has begun addressing the issue. It said a reform process had been initiated following a report by NITI Aayog’s High-Level Committee on QCOs and that full implementation of its recommendations could address many of the concerns.
The US similarly welcomed India’s recent repeal of some QCOs, but said others continued to affect exports of information and communication technology (ICT) products, medical devices and chemicals.
It urged India to provide greater opportunities for stakeholder consultation and avoid burdensome testing and certification requirements. India defended its regulatory framework, saying its SPS measures were aimed at facilitating legitimate trade while protecting public health, food safety and biosecurity.
“Our objective throughout has been to facilitate legitimate trade while safeguarding public health, food safety and biosecurity,” India’s representative to the WTO said, adding that India was committed to transparency through timely WTO notifications, engagement with WTO members and continued strengthening of its SPS systems.
On technical barriers to trade, India said its QCOs and other technical regulations were designed to meet legitimate objectives, including preventing deceptive practices and protecting human, animal and plant life or health and the environment.
The US also criticised India’s local-content requirements, saying they reduce the competitiveness of imported products across sectors including ICT goods, services, spirits and medical devices.
It specifically called for India to administer sector-specific measures such as the Import Management System for IT products and licensing and approval procedures for refurbished medical devices in a manner consistent with WTO obligations, without mandatory domestic testing requirements or quantitative restrictions.
Services remain another area of contention. While recognising India’s recent liberalisation of the insurance and legal sectors, the US said foreign participation remained restricted or prohibited in several other services sectors.
“In particular, broad restrictions in the electronic payment, retail, and e-commerce sectors appear intended to prevent a level playing field for foreign companies,” the US said, arguing that greater openness would boost foreign participation and help integrate India further into global supply chains.
The US also welcomed India’s consultations on the Digital Personal Data Protection Rules, 2025, but urged New Delhi to continue avoiding restrictions on cross-border data flows, including sector-specific data-localisation requirements.
The EU said the recently concluded India-EU free trade agreement, once ratified, should strengthen bilateral trade and investment ties. But it stressed that implementation would be critical, particularly because the agreement contains ambitious rules on non-tariff barriers.
