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For multinational corporations, the decision to shift manufacturing or to diversify supply chains is now less about cost and more about whether a jurisdiction offers regulatory continuity, enforceable contracts and credible oversight. At a time when many jurisdictions are edging towards ad-hoc, leader-driven economic decision-making, India’s ability to keep trade and investment policy anchored in democratic institutions confers a rare competitive advantage.
Why institutions and regulatory certainty matters more than ever
The rupee’s slide past the ₹90-per-dollar mark exposes the fragility of the current global moment. A weaker rupee reflects global monetary tightening, reduced foreign inflows and external imbalances. Yet the currency shock becomes damaging only when it coincides with regulatory instability. The world is today shaped by a sharper geoeconomic posture; major economies, including the United States, are raising tariffs on strategic sectors; rules of origin are tightening; supply chains are being reorganised on security rather than efficiency; and technology-denial regimes are expanding. These pressures have raised the cost of uncertainty for every open economy.
For India, the depreciation is at a moment when markets are watching for clarity. India has begun to confront these geoeconomic pressures, such as US’ reciprocal tariffs, not through protectionism but through structural risk-mitigation. The Export Promotion Mission, with an outlay of ₹25,060 crore, strengthens trade finance and reduces compliance friction. Similarly, the PLI schemes anchor manufacturing in sectors exposed to tariff volatility and the move towards GST 2.0 framework signals an effort to simplify indirect tax administration. India’s accelerated FTA engagement further diversifies market access. Together these measures reflect an emerging strategy to expand productive capacity, stabilise export ecosystems and reduce vulnerability to external shocks.
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All these steps point to a broader recognition that economic resilience flows from regulatory clarity. This is why the Finance Minister Nirmala Sitharaman’s recent signal that customs reform will be a core priority in the near future is economically material. Reformed customs procedures will strengthen institutional credibility and will help in shielding currency risk from amplifying into investment risk
Customs reform to be institutional in nature rather than mere administrative clean-up
India’s Customs architecture sits at the heart of the country’s engagement with global trade. While global trade faces headwinds and sweeping change, India’s Customs landscape needs institutional reform rather than a mere administrative clean-up, primarily because institutional strength is not abstract, it is operational. It is reflected in how predictable border procedures are, how swiftly licences are processed, how transparently disputes are adjudicated, and how coherently different regulators interact. When these systems function with clarity and due process, currency volatility does not automatically translate into investment hesitation. The resilience of institutions becomes the buffer.
Some indicative areas of reform that can translate institutional intent into operational certainty include:
1. Revamp of Authorised Economic Operator Certification Process: The AEO programme was intended to reward compliance with speed and certainty. But delays, inconsistent interpretations and prolonged processing have weakened its credibility. Time-bound disposal, provisional continuation of benefits, and uniform guidance on litigations must be central Budget reforms.
2. Liberalisation and Alignment of Export Control Framework with Global Regimes: In high-technology trade, regulatory delay leads to economic displacement. Deemed approvals for low-risk exporters, alignment with partner jurisdictions, a framework for intangible technology transfers, and digitally verifiable end-use certifications will communicate that India understands global tech-trade realities. Further expansion of Global Authorisation of Intra Company Transfers Scheme and General Authorization for Export of Telecommunication-related items Scheme will aid in reducing licensing friction for trusted entities and enable predictable movement of controlled technology within multinational groups.
3. Institutionalise stakeholder consultation in FTA negotiations: If India wants to be seen as a stable, rules-based economy, the method by which it negotiates and implements trade agreements must also reflect democratic discipline. Industry must have a structured channel to flag problematic tariff lines, regulatory barriers in partner countries, concerns around sensitive sectors such as dairy, automobiles and e-commerce, as well as SPS and TBT compliance burdens. A dedicated digital portal for such inputs would create a transparent, real-time interface between negotiators and affected sectors.
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4. Operationalise Section 11(3) of the Customs Act and enable true single window compliance: Multiple regulators have issued overlapping non-tariff measures, creating a fragmented compliance landscape for traders, especially MSMEs. Section 11(3) of the Customs Act already offers a framework to consolidate all such requirements into a single notified source, but it has not yet been operationalised. Issuing a comprehensive notification under this provision would create a unified and digitally accessible compliance regime.
5. Overhaul of Special Valuation Branch Process: Long pending SVB matters, and mandatory provisional assessments create open ended duty exposure. A clear, risk-based regime where only complex cases move to SVB and routine transactions are cleared through audit would significantly enhance predictability.
Predictability is India’s greatest trade policy instrument and each of the above-mentioned reforms will contribute to a more coherent, rules-based ecosystem that reduces uncertainty for businesses.
Strengthening the foundations of a trustworthy economy
In an age of volatility, countries that will attract long-term capital, are those where the law is stable, the process is transparent, and the state behaves predictably. If India anchors itself to that principle, the world will treat it not merely as a fast-growing economy but as a trustworthy one. Therefore, a Union Budget that modernises Customs law, codifies consultation, strengthens regulatory capacity and consolidates compliance pathways will communicate one message: India’s democracy is not just a constitutional construct, it is the bedrock of its economy.
*The authors are Partner and Assistant Manager at Deloitte India.