Exporters seek contract review as they brace for disruptions, disputes from new US tariffs

The sudden move is expected to disrupt commercial contracts and could lead to a wave of renegotiations and disputes, legal experts said.

Businesses are considering a range of options, including renegotiation of pricing terms, alternative sourcing strategies, and lobbying for relief measures through trade bodies and bilateral agreements, they said.

“Many Indian businesses are seeking clarity on whether existing pricing and delivery terms can hold in the face of sudden tariff impositions,” said Sanjay Notani, partner and co-head of international trade and customs practice at Economic Laws Practice (ELP).

“Such abrupt tariff changes can destabilise ongoing commercial arrangements, especially where goods are already in transit. Contract enforcement may become contentious if parties seek to renegotiate or walk away, citing economic impracticability,” he said.

Live Events

The imposition of a 27% tariff on Indian imports by the United States has sent shockwaves through key export-driven industries.

Raj Panchmatia, partner at Khaitan & Co, said many of the law firm’s exporter clients have approached it to undertake a detailed review of contracts to see on whom the liability to meet the additional tariff lies. The review would look at what remedies are available to parties under the contract to deal with issues such as cost escalation, price increases due to changes in law/taxes, imposing government embargo, material adverse effect, the applicability of force majeure clauses, etc, he said.

“However, most clients are still at the stage of weighing options and trying to amicably deal with the situation. If required some are trying to re-negotiate or look at alternate sourcing,” Panchmatia said. “Some are contemplating