70% of Indian Firms Say Cross-Border Trade Has Become Harder to Navigate

• 86% say cross-border operations have become more complex
• 78% have delayed or scaled back market entry
• More than half continue expanding with stronger compliance planning

PUNE, India, Feb. 23, 2026 /PRNewswire/ -- The 2026 Cross-Border Chaos Report from Avalara Inc. shows that Indian companies are contending with a trading environment that has steadily grown in complexity, with 70% of senior decision-makers saying cross-border trade has become more complex today than it was three years ago. The report reflects what companies have been experiencing on the ground and pulls together their concerns around the shifting regulations, tariff changes, and uneven enforcement standards that now influence the early stages of international planning.

86% of businesses say cross-border operations have become more complex in the past year, indicating that expansion continues but no longer at the pace seen earlier. At the same time, 78% report slowing or reconsidering new market entry due to regulatory uncertainty, even though more than half still plan to expand into additional markets. Together, these findings point to a more deliberate growth pattern in which companies pause to understand regulatory expectations before moving ahead.

The shift towards cautious expansion is becoming evident in how companies are preparing for new market entry. Tariffs, border procedures and documentation norms, along with the way local authorities interpret rules, are shaping conversations long before a company signs a new contract or opens an overseas office. Firms point out that South Asia, Europe and North America are among the regions where compliance expectations have grown, and the quality of preparation often determines whether operations begin smoothly or face early disruption.

Dulles Krishnan, General Manager, India Operations at Avalara, said, "Indian companies remain committed to global expansion, but the pace of regulatory change means planning must be both grounded and forward-looking. The report highlights rising tariff volatility, stricter documentation requirements, and the rapid shift toward real-time reporting. To navigate these challenges, companies need stronger systems, reliable data flows, and purpose-built technology that enables them to stay compliant, manage risk, and operate without disruption."

The survey also sheds light on how internal teams are recalibrating to meet rising demands. Tariffs and duties at 47%, customs and border processes at 41%, and the interpretation of local rules at 38% are rated as the biggest challenges — indicating that the most acute pressure points are occurring right at the point of cross-border movement, where even small errors can lead to delays, higher costs or shipment holds. These challenges cut across finance, logistics and legal functions, which means teams can no longer work in isolation because every decision carries both compliance and cost implications for multiple departments. The financial impact reinforces this shift, with companies spending an average of 11 % of their cross-border revenue on customs, taxes and regulatory management, a level that shows compliance is now a strategic cost driver that requires coordinated decision-making from the start.

Technology is becoming a consistent part of the operational backbone. A total of 89% of respondents say they are using systems that help reduce manual work and create a clearer, reliable view of compliance obligations across markets. Businesses point out that these tools help their teams keep pace with frequent rule changes and maintain documentation standards, particularly in markets where requirements are updated with little notice.

Once companies move from planning to operating in new markets, predictability still does not improve. Regulatory changes at 56%, border disruptions at 46% and unexpected fines or audits at 40% remain part of daily decision-making and continue to shape how teams manage their operations. Many organisations say these pressures have pushed them to invest in stronger processes that hold steady even when external conditions shift.

Indian companies are moving toward a disciplined and structured approach for global expansion. Market opportunity remains a strong driver, but success increasingly depends on consistent processes, reliable access to regulatory insights, tax and compliance systems that can support international operations without slowing momentum.

The full 2026 Cross-Border Chaos Report, including regional breakdowns and industry insights, is available to download at: https://newsroom.avalara.com/image/Avalara+Cross-Border+Chaos+Report.pdf 

About Avalara
Avalara is the agentic tax and compliance leader. For more than two decades, Avalara has developed one of the most expansive libraries of tax content and integrations in the industry, supporting over 200,000 direct and indirect customers across more than 75 countries. The company's purpose-built AI agents automate end-to-end compliance processes with greater precision, from tax calculations and return filings to exemption certificate management and beyond. For more information, visit Avalara.com.

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