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In an ideal world, sellers would do everything they can to get their wares to buyers willing to buy their goods. But that’s far from reality, as sellers need to overcome a host of obstacles to reach their buyers, many of whom may be oceans away from them.
For the economy to flourish, much depends on how the government, regulators, and sellers overcome these obstacles, as they aren’t as simple to deal with as you think.
2025 has been a challenging year for sellers from India, as the US President’s unreasonable tariffs forced them to seek new markets, even as manufacturing challenges due to slowing supply jacked up prices for a variety of products.
For 2026, Indian sellers will have to deal with increasingly uncertain obstacles that are not in their control, which could affect their revenues, and the Indian export economy as a whole.
Tariff Wars
US-led tariff hikes and rising Western protectionism threaten India’s export competitiveness in 2026.India, along with the rest of the developing world, witnessed this export risk factor in its most threatening way when newly elected US President Donald Trump imposed tariffs on a basket of goods that were threatening local jobs and businesses. Though there are signs that these tariffs won’t hold long, the damage was already done- shrimp farmers in Andhra Pradesh, apparel manufacturers in Tamil Nadu and diamond exporters from Surat saw their most lucrative market close overnight.
Rising protectionism in the West continues to remain strong, as cheaper imports continue to be seen as a threat to local jobs and businesses, forcing manufacturers to look at alternative markets in Europe, Southeast Asia, Africa and Latin America for their wares.
Global Conflicts
Ongoing wars disrupt commodity flows, energy access and fertilizer supplies, fuelling inflation risks.The Russia-Ukraine War, along with the Israel-Hamas war, has been going on for more than two years now, and have impended access to markets in the region- Russia, Ukraine and Israel. Though their impact has been largely limited for India, it has disrupted the global supply of raw materials (especially from Russia and Ukraine) and technology from Israel. This has led to higher prices for leading commodities (especially for fertilizers), jacking up prices across the world.
Supply Chain Issues
Rare earth curbs and AI-driven demand spikes strain electronics, auto and clean-tech sectors.Sudden spikes in demand for one technology puts enormous pricing pressures for commodities needed to produce them. In 2025, we saw that in real time when the demand for rare earth minerals, silver and copper skyrocketed as the exploding demand for clean technologies and AI data centers cascaded into increased demand for limited supply of these commodities. China, which dominates the processing of these rare earths, used this as a weapon to beat Trump’s trade tariffs.
This has made the supply of electronics components for cars and other machinery far more expensive and unreliable, affecting the competitiveness of the sector against foreign players.
Regional Security Tensions
Border disputes and unstable neighbours pose trade, logistics and investor confidence risks.“We Live in a troubled neighbourhood”, this statement has been repeatedly made by top politicians, including then Defence Minister AK Antony, ex Home Minister P Chidambaram and former External Affairs Minister SM Krishna. At both our Western and Eastern borders, we have Pakistan and China, who we have border disputes with, and we have to deal with unstable governments in Nepal, Bangladesh, Maldives and Sri Lanka. All of these can affect our trade with them, including arbitrary trade bans and supply chain issues in the case of skirmishes or disputes.
Beyond South Asia, China is being seen as a regional bully, with its aggressive posturing threatening trade in the immediate South China Sea, with the disruption of semiconductor supplies from Taiwan being an existential threat that can cause widespread inflation and global supply chain disruptions.
Data Security Risks
Import restrictions on critical tech tighten compliance and raise costs for Indian industry.India’s reliance on imports for critical machinery relating to transport, power grids, water systems and defence have forced the government to restrict imports from certain state-linked suppliers. With a limited pool of suppliers and rising prices for this critical equipment, Indian buyers have to meet ever-stringent rules put forth by the government to ensure data security.
Despite the push for indigenous technologies through Aatmanirbhar Bharat, India still has to import critical components from abroad, with any supply disruption affecting our manufacturing capabilities.
Climate Change
Extreme weather threatens food supply, infrastructure stability and inflation control.Extreme weather, droughts and unseasonal weather events have become more routine than ever, threatening global food supply and damaging infrastructure. This could also result in geopolitical tensions and food security issues, especially if the crops in question is not enough to cover the demand for the year.
Such climate shocks can result in runaway inflation and force the government to subsidize more food than ever, eventually affecting the economy.
Fragmentation of Global Governance
WTO delays and shifting alliances complicate trade deals and market access for exporters.Over the last two decades, the UN has been slowly losing its relevance, as multinational alliances like the BRICS and the G20 have taken over. These aim to address the unfair dominance of the West or China in trade, and aim to offer solutions that can boost inter-country trade
Delays in implementing trade deals between countries or WTO guidelines remain a persistent challenge to access lucrative international markets, creating uncertainties and missed opportunities for these exporters.
English (US) ·