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1Trade Watch October-December (Q3) FY25 October-December (Q3) FY25
TRADE WATCH
QUARTERLY TRADE WATCH QUARTERLY, Quarterly Report for the FY25
Copyright@ NITI Aayog, 2025
Published: July 2025
NITI Aayog
Government of India
Sansad Marg, New Delhi-110001, India
Trade Watch October-December (Q3) FY25 October-December (Q3) FY25
TRADE WATCH
QUARTERLY July’ 2025
[Suman K. Bery]

Dr. Pravakar Sahoo
Senior Advisor (Economics & Finance – I)
National Institution for Transforming India (NITI Aayog)
Government of India
Acknowledgement
In the backdrop of rising geo-economic fragmentation, digitalisation of trade, and shifting global
demand patterns, the need for real-time, data-driven trade monitoring has never been more
critical. The Trade Watch Quarterly (TWQ) is a strategic knowledge product that seeks to bridge
this gap by offering timely analysis of India’s performance.

With its thematic spotlight on emerging global tariff trends because of US trade policy in recent
months and India's export positioning, this edition aims to analyse how these shifts influence
India's relative competitiveness and open new avenues for export expansion. It further examines
India's positioning in high-technology and digital services exports, highlighting potential areas
for trade diversification and policy leverage. We intend to equip stakeholders from government
to industry to academia with timely, relevant, and actionable trade intelligence.

I would like to take this opportunity to express my deep gratitude to Shri Suman Bery, Vice
Chairman, NITI Aayog, whose encouragement and support have been crucial in driving our
efforts. I am immensely thankful to Shri B.V.R. Subrahmanyam, CEO, NITI Aayog, for his
visionary leadership and steadfast commitment, which have played a central role in shaping this
report. His continuous guidance, strategic foresight, and dedication to excellence have set a
remarkable standard for all of us. I thank Hon’ble member, Dr. Arvind Virmani, for his
continued support and guidance.

I thank all the members of NITI Aayog for their support and valuable contributions to this
initiative. The successful completion of this report is a testament to the collective efforts of the
Economics & Finance–I vertical. I would like to sincerely thank Shri Amit Verma, Jyotika
Nagvanshi, Mala Parashar, Pooja Teotia, Apica Sharma, Abhilasha Manda, Salome Sara Philips,
Riya Jindal and Kavya Raghuram Rao for their dedication, hard work, and collaborative spirit
throughout the development of this edition.

We hope this edition of Trade Watch serves as a valuable resource for navigating the shifting
contours of global trade and guiding strategic decisions in India’s journey to becoming a leading
trade powerhouse.
New Delhi
July’ 2025 Dr. Pravakar Sahoo iTrade Watch October-December (Q3) FY25
ADVISORY BOARD
S. No. Board MemberAffiliation
1 Harsha Vardhana Singh Former Deputy Director, WTO
2 Santosh Kumar Sarangi
Former Additional Secretary & Director
General, DGFT
3 Pravin KrishnaProfessor, Johns Hopkins University
4 Rupa ChandaDirector, UNESCAP
5 Deepak MishraDirector and Chief Executive, ICRIER
6 Rakesh Mohan Joshi Professor and Chairperson, IIFT, Delhi
7 Arpita Mukherjee Professor, ICRIER
8 James J. Nedumpara
Professor and Head, Centre for Trade and
Investment Law (CTIL)
9 Pritam Banerjee
Professor and Head, Centre for WTO
Studies
10 C VeeramaniDirector, Centre for Development Studies
11 Sanjay Kathuria Visiting Senior Fellow, CSEP
12 Biswajit NagProfessor, IIFT
13 Debashis Chakraborty Professor, IIFT, Kolkata iiTrade Watch October-December (Q3) FY25
EXECUTIVE SUMMARY
International trade is a powerful catalyst for economic growth, productivity, and
long-term development across nations. India’s trade performance in Q3 FY25
(October–December 2024) reflected cautious resilience amidst geopolitical volatility
and shifting global demand.
Merchandise exports registered a modest year-on-year growth of 3%, reaching USD
108.7 billion. The export composition remained largely stable, with notable shifts
such as the rise of aircraft and spacecraft into the top ten export categories. North
America and the European Union regionally continued to account for approximately
40% of total exports. On the other hand, imports expanded by 6.5% to USD 187.5
billion, widening the merchandise trade deficit. On the import side, growth was
observed in animal or vegetable fats and oils (up 51.4%), particularly soybean oil from
Argentina, and precious stones and pearls (up 18.6%). Northeast Asia and West Asia
remained the leading sources of imports for India.
The services sector continued to demonstrate strength, with exports rising by 17%
year-on-year to USD 102.6 billion and imports increasing by 22.5% to USD 52.4 billion.
This resulted in a services trade surplus of USD 52.3 billion, offering partial offset to
the merchandise imbalance. Additionally, India ranked as the world’s fifth-largest
exporter, with $269 billion in Digitally Delivered Services (DDS) exports in 2024,
powered by IT services, professional consulting, and R&D outsourcing, strengthening
India’s position as a global hub for digital trade. High-tech merchandise exports
have also gained momentum since 2014, led by electrical machinery and arms/
ammunition, growing strongly at 10.6% CAGR.
The thematic focus of this quarter’s edition is the United States’ evolving trade policy,
notably the introduction of the current US tariff regime since April 2025 till 10
th
July’
2025, and its implications for India’s export competitiveness. The US implemented a
baseline 10% tariff on all imports, alongside higher tariffs on specific trading partners
such as China, Canada, Mexico, Vietnam, and Thailand. While India’s average tariff
exposure remains moderate, this policy shift presents a unique strategic opportunity
for Indian exporters. Analysis at the HS-2 and HS-4 levels shows India is well-positioned
to gain market share in a significant portion of its exports to the US, covering over
61% of trade value in the top 30 HS-2 product categories and 52% in the top 100 HS-4
product categories.
These developments highlight the strategic importance of the US as India’s largest
export destination and a key growth corridor. India must pursue complementary
policy measures to capitalise these advantages, including targeted export promotion,
deeper integration into global value chains, and a services-focused trade agreement
with the US building institutional frameworks around digital trade, cross-border data
flows, and mutual recognition agreements can expand India’s services footprint
further. The evolving global trade environment demands agile policymaking on new
trade alignments. iiiTrade Watch October-December (Q3) FY25
HIGHLIGHTS
1. In Q3 FY25, merchandise exports grew by 3% (to $108.7 bn) while imports rose
by 6.5% (to $187.5 bn) widening the trade deficit to $78.7 bn. However, a services
surplus of $52.3 bn, driven by 17% growth in services exports, partially offset this
gap.
2. Export composition remains stable; aircraft, spacecraft and parts entered the top
ten exports surging by over 200% year-on-year due to increased demand from
Saudi Arabia, UAE, and Czech Republic.
3. Despite the dominance of lower-tech exports, India’s export structure gradually
shifts toward medium-high and high-tech, indicating rising export sophistication.
4. India’s high-tech exports grew 10.6% CAGR to $80.6 billion in 2024, comprising
18.3% of total merchandise exports.
5. Electrical machinery and parts emerged as the top high-tech export in 2024,
making up 50% of the segment and surpassing nuclear reactors and boilers,
which led in 2014.
6. India’s DDS exports more than doubled over the decade, reaching $269 billion in
2024 and making the country the fifth-largest exporter globally.
7. In the DDS export composition for 2024, ‘Other Business Services’ led with a 53%
share, followed by ‘Computer Services’ at 39%, aligning with global trends.
8. In the current US tariff regime, at the HS 2 level, India is expected to gain
competitiveness in 22 of the top 30 product categories, covering 61% of its
exports to the U.S. and representing 68% of total US imports.
9. Similarly, at the HS 4 level, India enjoys a favorable tariff differential in 78 of
the top 100 products, accounting for ~52% of its exports to the US.
10. India gains a tariff edge over China, Mexico, and Canada in key HS 2 sectors,
enhancing market potential in nuclear reactors, iron and steel, textiles, electricals
and vehicles.
11. In sectors where India does face slightly higher tariffs (6 out of top 30 HS 2
categories), the average tariff disadvantage is only 1%, suggesting India remains
broadly competitive.
12. Due to realigned US tariffs on competitors, India has opportunities in high-
value sectors (e.g., electronics, nuclear reactors) and labour-intensive goods (e.g.,
apparel, textiles). ivTrade Watch October-December (Q3) FY25
Contents
A. India’s Trade Analysis��1
1. Merchandise and Services Analysis��2
2. Compositional Analysis��3
3. Trade Direction��6
4. Regional Analysis��7
5. Merchandise Trade with FTA Partners��8
6. Technology Intensity of India’s Merchandise Exports��9
7. India’s Export of Digitally Delivered Services (DDS)��12
B. Thematic Analysis: US Trade Policy and Its Implications on India��15
1. Impact of the Current US Tariffs on India��20
2. Policy Measures for Boosting Merchandise Trade��28
3. Policy Measures for Boosting Services Trade��30
C. Policy and Geopolitical Highlights��31
1. Global Trade–Related Policy Updates for India’s Major Partners��32
2. India’s Trade Policy Developments��32
3. Geopolitical Developments��33
4. Commodity Price Trends��33
D. Appendix��35 1Trade Watch October-December (Q3) FY25
A.
INDIA’S TRADE
ANALYSIS 2Trade Watch October-December (Q3) FY25
A. India’s Trade Analysis
Global trade in goods and services increased by approximately 3.7% in the Q3 FY25,
driven by modest expansion in goods trade (2%) and strong momentum in services
trade (9%). Over the past four quarters, developing economies have generally
registered higher overall trade growth than their developed counterparts.
1
India’s merchandise and services trade performance remained steady between April
and December. During this period, total trade amounted to $1290.35 bn, reflecting
a year-on-year increase of ~7%. In Apr-Dec 2024, exports rose by 6.63% year-on-year,
reaching $606 bn, while imports grew by 7.29%, reaching $684.4 bn. (Figure 1).
Figure 1: Trade performance in Apr-Dec FY256.98%
6.63%
7.29%
6.5%
6.6%
6.7%
6.8%
6.9%
7.0%
7.1%
7.2%
7.3%
7.4%
0
200
400
600
800
1000
1200
1400
Total Trade Export Import
USD Billion
Apr-Dec 2023 Apr-Dec 2024 Change % (RHS)
Source: Department of Commerce, MoC&I, GOI
1. Merchandise and Services Analysis
In December 2024, merchandise exports recorded a slight year-on-year decline of
$0.59 bn, reaching $37.8 bn, while imports registered a 2.3% increase, reaching $58.5
bn (Figure 2). On a volume basis, both exports and imports witnessed a year-on-
year contraction. During Q3 FY25, monthly average exports stood at $36.2 bn, and
imports averaged $62.4 bn. On a quarterly basis, exports rose modestly by 3% year-
on-year to $108.7 bn, whereas imports grew by 6.5% to $187.5 bn. (Figure 3)
Figure 2: Merchandise Trade (Monthly) Figure 3: Merchandise Trade (Quarterly) -1.53%
2.32%
-2.5%
-1.5%
-0.5%
0.5%
1.5%
2.5%
0
10
20
30
40
50
60
70
Dec (EX) Dec (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
3.00%
6.47%
0%
2%
4%
6%
8%
-
20
40
60
80
100
120
140
160
180
200
Q3 (EX) Q3 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)

Source: Department of Commerce, MoC&I, GOI
1 https://unctad.org/system/files/official-document/ditcinf2025d1.pdf 3Trade Watch October-December (Q3) FY25
In December 2024, India’s services exports stood at $32.7 bn, registering a year-on-
year growth of 3.26%, while services imports increased more sharply by 11.96% to
approximately $17.5 bn. During Q3 FY25, services exports witnessed a robust annual
expansion of 17%, amounting to $102.6 bn. Services imports rose by 22.52% to $ 52.4
bn during the same period, resulting in a net services trade surplus of $ 50.2 bn.
Figure 4: Services Trade (Monthly) Figure 5: Services Trade (Quarterly) 3.26%
11.96%
0%
2%
4%
6%
8%
10%
12%
14%
-
5
10
15
20
25
30
35
Dec (EX) Dec (IM)US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
16.98%
22.52%
0%
5%
10%
15%
20%
25%
-
20
40
60
80
100
120
Q3 (EX) Q3 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
Source: Department of Commerce, MoC&I, GOI
As of December 2024, merchandise exports stood at $312.3 bn, while imports totalled
$534.3 bn, resulting in a trade deficit of $212 bn. On the services front, exports
amounted to $284.6 bn and imports to $150 bn, yielding a net surplus of $134.6 bn.
The combined balance of trade in goods and services registered a net deficit of $78.3
bn for the year ending December 2024.
2. Compositional Analysis
Merchandise Exports
In Q3 FY25, India’s leading
2
export commodities included mineral fuels (12.3%),
electrical machinery and equipment (11.0%), and nuclear reactors (7.5%). Notably,
exports of aircraft, spacecraft, and related parts experienced a steep increase of over
200% year-on-year. Cereals and electrical machinery also recorded annual growth
rates of 75.2% and 40.8%, respectively. In contrast, exports of natural and cultured
pearls declined by over 14% on year-on-year basis during the same period. (Figure 6)
Exports of aircraft, spacecraft, and parts registered a sharp increase, driven by
heightened demand for commercial aircraft and cargo planes, particularly from
Saudi Arabia, the UAE, and the Czech Republic. Electrical machinery exports also
saw a strong uptick, primarily due to the surge in smartphone shipments, which
rose from approximately $4 bn in Q3 FY24 to $7 bn in the Q3 FY25—reflecting a
growth of nearly 74%. Within the cereals category, rice exports recorded robust
growth following the removal of export restrictions on various rice types in October.
3
2 Leading commodities are the top ten commodities with the highest value share in exports.
3 https://content.dgft.gov.in/Website/dgftprod/28145972-b272-44ac-8778-c52502d4c5bd/Notification%20
No.%2037-2024-25%20dated%2023.10.2024%20-English.pdf 4Trade Watch October-December (Q3) FY25
Figure 6: Q’3 Composition and Growth of Exports12.3%(-36.3%)
11.0%(40.8%)
7.5%(10.6%)
6.9%(-14.2%)
5.3%(3.2%)
5.2%(9.4%)
4.6%(7.0%)
3.4%(75.2%)
2.6%(211.9%)
2.4%(8.8%)
0% 2% 4% 6% 8% 10% 12% 14% 16%
Mineral fuels, mineral oils & products
Electrical machinery & equipment & parts
Nuclear reactors, boilers, machinery & parts
Natural, cultured pearls,precious or semiprecious
stones
Pharmaceutical products
Vehicles other than railway & parts thereof
Organic chemicals
Cereals
Aircraft, spacecraft & parts
Articles of iron or steel
Note: Year-on-year growth of the commodity in India’s export for this quarter is mentioned in parenthesis
Source: Department of Commerce, MoC&I, GOI
Merchandise Imports
The leading
4
imports in the third quarter include mineral fuels (29.5%), natural and
cultured pearls (13.8%), electric machinery (11.8%), and nuclear reactors (8.7%). Strong
import growth was witnessed in animal fats and oils, which increased by 51.4%,
followed by natural or cultured pearls, precious and semi-precious stones (18.6%),
and electrical machinery (11.4%). In contrast, iron and steel imports registered a sharp
decline of 21%. (Figure 7)
The sharp rise in imports under the chapter on animal or vegetable fats and oils
was primarily driven by increased shipments of crude soybean oil, particularly from
Argentina, and palm oil from Indonesia. Imports of natural and cultured pearls,
precious and semi-precious stones saw an uptick due to higher inflows of uncut and
industrial diamonds from Canada.
4 Leading commodities are the top ten commodities with the highest value share in imports. 5Trade Watch October-December (Q3) FY25
Figure 7: Q’3 Composition and Growth of Imports29.5%(-1.9%)
13.8%(18.6%)
11.8%(11.4%)
8.7%(10.3%)
3.4%(0.7%)
3.0%(2.1%)
2.6%(51.4%)
2.4%(-21.0%)
1.9%(7.8%)
1.8%(1.2%)
0% 5%10%15%20%25%30%35%40%45%
Mineral fuels, mineral oils & products
Natural, cultured pearls,precious or semiprecious
stones
Electrical machinery & equipment & parts
Nuclear reactors, boilers, machinery & parts
Organic chemicals
Plastic and articles
Animal or vegetable fats and oils
Iron and steel
Optical, photographic cinematographic measuring
parts and accessories
Fertilisers
Note: Year-on-year growth of the commodity in India’s imports for this quarter is mentioned in parentheses
Source: Department of Commerce, MoC&I, GOI
Table 1: Q3 Non-Petroleum Exports and Imports
Particulars
5
Q3 FY24 (USD bn) Q3 FY25 (USD bn) Year-on-Year Growth (%)
Exports
(non-petroleum)
85.4196.0912.5%
Imports
(non-petroleum)
130.06146.5612.7%
Trade Deficit-44.65-50.4713.0%
Source: Department of Commerce, MoC&I, GOI
In Q3 FY25, non-petroleum trade growth has outpaced overall export and import
growth. Non-petroleum exports grew by 12.5% compared to just 3% for overall exports,
indicating strong performance in non-oil sectors such as electronic machinery.
Similarly, non-petroleum imports rose by 12.7%, nearly double the 6.5% growth in
overall imports, reflecting robust domestic demand. As a result, the non-petroleum
trade deficit widened by 13%, faster than the overall trade gap. (Table 1)
5 For computing non-petroleum exports and imports, HS codes 2709, 2710, 2712, 2713, 2714, and 2715 have
been excluded. 6Trade Watch October-December (Q3) FY25
3. Trade Direction
Merchandise Exports
India’s exports to its top markets
6
(USA, UAE, Netherlands, Singapore, UK and China)
accounted for about ~42% of Q3 FY 25 exports. Exports to the top ten markets showed
a year-on-year increase of 6.54%, with positive export growth recorded in eight of the
top ten economies, with Singapore and Australia clocking a year-on-year growth of
over 50%. However, declines were recorded with the Netherlands (18.3%) and China
(18.35%) compared to Q3 FY24. (Figure 8).
Exports to Singapore increased 52% year over year, primarily due to higher shipments
of large cargo vessels and petroleum products. Exports to Australia also increased,
supported by a rise in petroleum product exports and electrical components.
Figure 8: India’s exports to major destinations
-40%
-20%
0%
20%
40%
60%
0
4
8
12
16
20
USD Billion
Q3 FY24 Q3 FY25 % Y-o-Y Growth Q3 (RHS) % share in India's exports Q3'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
7
Merchandise Imports
India’s import exposure to its top markets
8
—China, UAE, Russia, and the USA—made
up nearly ~38% of total imports. Import growth was experienced in seven out of the
top ten import destinations in terms of share of total imports during Q3 FY25. Imports
to the top ten economies experienced a 8.5% year-over-year growth, growing from
$103 bn to $112 bn.
In Q3 FY25, India continued to record strong year-on-year import growth with UAE
(37.2%), on account of rising gold and crude imports. Imports from Iraq declined by
7.9% due to declining demand for dates and bitumen petrol in domestic markets.
Imports from Indonesia declined by 9% due to a decline in coal imports. (Figure 9)
6 Top markets are those that account for the top 10 shares of total exports in Q3 FY25.
7 For the purpose of this analysis, the top 10 destinations were examined based on their export shares in the
total exports for this quarter.
8 Top markets are those that account for the top 10 shares of total imports in Q3 FY25. 7Trade Watch October-December (Q3) FY25
Figure 9: India’s imports from major destinations-20%
-10%
0%
10%
20%
30%
40%
0
5
10
15
20
25
30
USD Billion
Q3 FY24 Q3 FY25 % Y-o-Y Growth Q3 (RHS) % share in India's imports Q3'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
4. Regional Analysis
Merchandise Exports
India’s Q3 FY25 exports revealed a mixed performance across regions, but they
registered an overall growth of 4.2%, amounting to $96.5 bn this quarter. Eight out
of ten regions experienced positive year-on-year growth.
Exports continue to be primarily directed towards North America, the EU, West
Asia (GCC), and ASEAN, accounting for 61% of total exports. ASEAN, West Africa, and
South Asia recorded strong growth at 21%, 26.5%, and 16.6%, respectively. Exports to
ASEAN surged due to increased exports to Singapore surging from $0.6 bn to $2 bn
compared to Q3 FY24. (Figure 10)
Figure 10: Region-Wise Export Composition and Growth Q’3 20.3%(5.4%)
17.0%(2.6%)
14.0%(3.3%)
9.8%(21.0%)
7.6%(-14.9%)
6.4%(16.6%)
4.6%(1.4%)
3.5%(6.3%)
3.2%(26.5%)
2.6%(-16.7%)
0% 5% 10% 15% 20% 25%
North America
EU Countries
West Asia- GCC
ASEAN
NE Asia
South Asia
Other European Countries
Latin America
West Africa
East Africa
Note: Year-on-year growth of the commodity in India’s exports for this quarter is mentioned in parentheses
Source: Department of Commerce, MoC&I, GOI 8Trade Watch October-December (Q3) FY25
Merchandise Imports
India’s Q3 FY25 imports registered an overall growth of 6.7%, reaching $171.36 bn
this quarter for the top ten regions. Eight out of ten regions continue to experience
positive year-on-year growth, with five regions experiencing a positive growth rate
exceeding 10%.
India’s imports mainly came from Northeast Asia, West Asia (GCC), and ASEAN,
accounting for 52.5% of total imports in Q3 FY25. NE Asia continues to dominate
imports, growing by 4.32% year-on-year. Latin America witnessed the highest growth
at 30.71%, contributing 3.6% to total imports, whereas ASEAN, which accounts for 11%
of trade, witnessed the least growth in trade of less than 1%. Imports from the EU and
certain West Asian countries also experienced a decline.
While region-wise imports remained largely stable, growth was notable in emerging
markets. Latin America saw strong import growth, particularly from Argentina (100%.
The EU saw an overall decline in imports, with notable drops from key members
such as France and Greece, despite a few outliers. (Figure 11)
Figure 11: Region-Wise Import Composition and Growth Q’324.5%(4.3%)
17.1%(17.3%)
11.0%(0.7%)
8.8%(11.5%)
8.1%(-4.8%)
7.2%(4.4%)
4.7%(-5.2%)
4.0%(14.7%)
3.6%(30.7%)
2.6%(11.0%)
0% 5% 10% 15% 20% 25% 30%
NE Asia
West Asia- GCC
ASEAN
Other CIS Countries
EU Countries
North America
Other West Asia
European Free Trade Association (EFTA)
Latin America
East Asia (Oceania)
Note: Year-on-year growth of the commodity in India’s imports for this quarter
is mentioned in parentheses
Source: Department of Commerce, MoC&I, GOI
5. Merchandise Trade with FTA Partners
In Q3 FY25, exports to FTA countries totalled $43.19 bn, reflecting a 16% year-on-year
increase. Major gains exceeding 50% were experienced in Bhutan (53.4%), Singapore
(52.0%), and Australia (50.4%), contributing to the overall growth. However, declines
were experienced in Mauritius (53.4%) and South Korea (7.2%). (Figure 12) 9Trade Watch October-December (Q3) FY25
Figure 12: Exports- FTA Countries-60%
-40%
-20%
0%
20%
40%
60%
0
2
4
6
8
10
12
USD Billion
4?)<4)<<R<4*IRZWK5+6
Source: Department of Commerce, MoC&I, GOI
Figure 13: Imports- FTA Countries(+800%)
Source: Department of Commerce, MoC&I, GOI
In Q3 FY25, imports from FTA countries grew by 7% year-on-year, reaching $66.7 bn.
Mauritius led the growth with a significant 800% increase ($0.15 bn), driven strong
demand for floating or submersible drilling or production platforms (HS 890520)
in December contributing 87% to the total imports from Mauritius in the quarter.
Comparatively, in terms of import volume it stands at $149.6 million.
Malaysia (37.9%), UAE (37.2%), and Thailand (32.6%) also demonstrated strong import
growth. However, Nepal (85.2%) and Bhutan (76.2%) recorded significant declines.
Overall, in Q3 FY25, trade with FTA partners resulted in a deficit of $23.4 bn, marking
a 7.5% year-on-year decline. (Figure 13)
6. Technology Intensity of India’s Merchandise Exports
Manufacturing production and exports play a critical role in driving economic growth.
In this section, the technology intensity of India’s exports has been categorised
into four groups, similar to the OECD classification of the degree of intensity.
9
The
results reveal that India’s exports continue to be dominated by low and medium-low
technology in 2024, similar to 2014, although medium-high and high technology
9 Definitions and detailed classification of chapters based on technology intensity are based on authors
classification and has been presented in the Appendix 10Trade Watch October-December (Q3) FY25
have experienced a strong CAGR of 5.8% and 10.6%, respectively.
Technology Intensity of Exports in 2024 highlights that India’s exports remain
concentrated in medium-low-technology products (37.6%), with the global average
also inclined towards medium-low technology (31%). India also maintains a higher
proportion of low-tech exports (23.5%) than the global average (17.7%), signalling
a continued reliance on traditional sectors. Notably, India lags in high-technology
exports, with only 18.3% of its export basket in this category, compared to nearly
a third globally. Medium-high-technology exports are more aligned, with India at
20.6% and the world at 20.8%.
Figure 14: Export Intensity by Technology Level (2024): India vs World23.5%
37.6%
20.6%
18.3%
17.7%
31.0%
20.8%
28.5%0%
10%
20%
30%
40%
Low-Technology
Medium-Low-Technology
Medium-High-Technology
High-TechnologyIndia
World
Source: ITC Trade Map
Between 2014 and 2024, India’s export basket has gradually shifted towards higher
technology intensity, although lower-end technology continues to dominate its
basket. Low-technology exports grew marginally at a CAGR of 1.4%, but their share
in India’s export mix declined from 28.5% to 23.5%, reflecting a relative stagnation
compared to global trends. Medium-low-technology exports also saw muted growth
at 1.4% CAGR, underperforming global growth (1.3%) and losing export intensity. In
contrast, India made strong progress in medium-high and high-technology exports.
Medium-high-tech exports grew at 5.8% annually, and high-tech exports surged
at 10.6% CAGR, outpacing global growth in these segments, leading to increased
export intensity ratios.
This structural shift indicates a moderate but rising diversification of India’s
export base towards more sophisticated sectors , which aligns better with global
trends. However, it still trails global averages in high-tech export intensity. (Table 2) 11Trade Watch October-December (Q3) FY25
Table 2: Export Intensity by Technology Level: Comparisons and Growth Trends
201420242014-2024
Export
Technology
Intensity
India’s
Export
Intensity
World’s
Export
Intensity
World
Demand
Catered
by India
India’s
Export
Intensity
World’s
Export
Intensity
World
Demand
Catered
by India
CAGR
(India)
CAGR
(World)
Low-
Technology
28.5%
($90.6)
18.2%
($3417.4)
2.65%
23.5%
($140.0)
17.7%
($4235.9)
2.46% 1.4% 2.2%
Medium-
Low-
Technology
45.5%
($144.6)
34.5%
($6496.1)
2.23%
37.6%
($165.9)
31%
($7411.9)
2.24% 1.4% 1.3%
Medium-
High-
Technology
16.3%
($51.9)
19.4%
($3658.9)
1.42%
20.6%
($91.1)
20.8%
($4967.0)
1.83% 5.8% 3.1%
High-
Technology
9.3%
($29.41)
25.7%
($4836.6)
0.61%
18.3%
($80.6)
28.5%
($5809.1)
1.18% 10.6% 3.5%
Note: Volume of exports is mentioned in brackets and is denoted in $ billion
Source: Authors Calculation & ITC Trade Map
High Technology Exports: India’s high technology exports have witnessed a strong
CAGR of 10.6% during the period, with exports touching $80.6 billion, a doubling of
intensity since 2014. Arms and ammunition and electrical machinery witnessed the
strongest CAGR in the category, growing from ~23% and ~16% respectively. Notably,
photographic and cinematographic goods experienced a ~4% CAGR decline during
the period. Electrical machinery and parts have emerged as this category’s major
high-technology export item, accounting for 50% of exports in 2024. In contrast, in
2014, the leading chapter was nuclear reactors and boilers, commanding a share of
~46%.
Figure 15: India’s Technology Export Intensity (2014-2024)24%
36%
38%
21%
18%
0%
10%
20%
30%
40%
50%
2014201520162017201820192020 2021202220232024
Low-TechnologyMedium-Low-Technology
Medium-High-TechnologyHigh-Technology
Source: Authors Calculation and ITC Trade Map
Medium-High Technology Exports: This category has also witnessed a strong CAGR
of ~6% during this period for India, with the share rising in this category for nine
chapters and declining for two namely – vehicles other than railways (28% to 24%) 12Trade Watch October-December (Q3) FY25
and ships, boats and other floating structures (9% to 5%). Pharmaceutical products
continue to dominate this category, accounting for the largest share of exports at
25.6%. Strongest growth in this category was experienced in the inorganic chemicals
and railways, tramway locomotives of ~10%.
7. India’s Export of Digitally Delivered Services (DDS)
India’s DDS exports have emerged as a major growth engine, driving the country’s
shift toward a services-led export model. Since 2018, India has consistently outpaced
global DDS export growth, becoming the world’s fifth-largest exporter in 2024 with
$269 billion in exports—more than double the level a decade ago. Between 2015
and 2024, India’s DDS exports nearly tripled, far outpacing merchandise and overall
services exports. This reflects a structural shift toward digital trade, driven by rising
global demand for IT and remote services.50
100
150
200
250
300
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
MerchandiseServicesDDS
INDEX2015=100
50
100
150
200
250
300
2015201620172018201920202021202220232024
World India US China Singapore
INDEX2015=100
Figure 16 A: Export Growth: Merchandise,
Services & DDS
Figure 16 B: Growth Comparison
of DDS Exports
Source: Authors Calculation and WTO
DDS includes IT services, BPO, financial, telecom, and professional services delivered
remotely. Globally in 2024, “Other Business Services” accounted for 40% of DDS
exports, followed by “Computer Services” (21%) and “Financial Services” (17%). India’s
export profile is similarly concentrated, with “Other Business Services” making up
~53% and “Computer Services” ~39% of total DDS exports. India holds a global share
of 10.8% in Computer Services and 7.7% in Other Business Services.
While developed countries continue to dominate trade in DDS, the share of developing
countries has increased from 19% in 2010 to 24% in 2022, with China accounting for a
significant portion.
10
According to WTO, global exports of DDS reached $4.6 trillion in
2024
11
, with developing countries cumulatively surpassing the $1 trillion mark for the
first time.
12
The OECD’s Digital Services Trade Restrictiveness Index (STRI) shows that,
by 2024, India had implemented one of the highest numbers of liberalising reforms,
supporting its strong export performance. However, its score is relatively higher than
the average of other countries,
13
indicating the need to further reduce restrictions.
14
10 https://unctad.org/news/digitally-deliverable-services-boom-risks-leaving-least-developed-countries-be-
hind
11 https://www.wto.org/english/res_e/statis_e/gstdh_digital_services_e.htm
12 https://unctad.org/news/developing-economies-surpass-1-trillion-mark-digitally-deliverable-services-ex-
ports
13 The OECD average for STRI (2024) stands at 0.19 with US at 0.17, China at 0.23, Singapore at 0.22 and India
at 0.29
14 https://www.oecd.org/en/publications/oecd-services-trade-restrictiveness-index_9953845b-en.html 13Trade Watch October-December (Q3) FY25
Figure 17: Export of Digitally Delivered Services 2024
0.1%
1.3%
0.6%
0.8%
1.4%
3.0%
39.5%
53.3%
0% 10% 20% 30% 40% 50% 60%
Information
Insurance and pension
Charges for the use of intellectual property
n.i.e.
Telecommunications
Personal, cultural, and recreational
Financial
Computer
Other business
India's share in World's digitally delivered services 2024
Share in India's digitally delivered services 2024
Source: Authors’ Calculation and WTO
As per WTO estimates, India’s imports of DDS have steadily increased over the
years, reaching $116.9 billion in 2024, up from $41.4 billion in 2015. This reflects the
expanding role of digital services in supporting various sectors of the economy.
India’s demand is also led by Other Business Services (51.6%), with growing imports
of Computer Services (15.4%) and IP-related charges (13.9%), reflecting rising needs
for digital infrastructure and technical know-how.
Figure 18: Imports of Digitally Delivered Services 20241.0%
2.5%
3.1%
3.9%
8.7%
13.9%
15.4%
51.6%
0% 10% 20% 30% 40% 50% 60%
Information services
Persona l, cultura l, a nd recrea tio na l services
Telecommunications services
Financia l serv ic es
Insurance and pension services
Charges for the use of intellectual property n.i.e.
Computer s ervices
Other business services
India's share in World's digitally delivered services (2024)
Share in India's digitally delivered services (2024)
Source: Authors Calculation and WTO 14Trade Watch October-December (Q3) FY25
To support the continued growth of digitally delivered services (DDS) exports, few
focused policy measures include easing regulatory barriers, particularly around
cross-border data flows, and clarity in digital trade rules. Strengthening digital skills,
encouraging investment in domestic R&D and exploring digital trade provisions in
future FTAs may also help expand market access. In addition, setting up a Digital
Export Promotion Council could assist smaller firms in reaching new markets, while
facilitating responsible access to imported digital services can support innovation
and domestic capacity-building 15Trade Watch October-December (Q3) FY25
B.
THEMATIC ANALYSIS:
US TRADE POLICY AND
ITS IMPLICATIONS
ON INDIA 16Trade Watch October-December (Q3) FY25
B. Thematic Analysis: US Trade Policy and Its Implications on
India
Exports have been a key driver of India’s economic growth and market share
expansion. Between 1995 and 2018, India’s total exports grew at an average annual
rate of 13.4%, nearly double the global average, with manufacturing exports rising by
12.1%. This strong export performance contributed to gains in per capita GDP, with
India’s global GDP rank improving from 11
th
in 1995–2001 to 4
th
in 2002–2011 among
72 major non-oil economies. Exports have thus been a key driver of India’s economic
growth and market share expansion.
15
Figure 19: India’s top 10 Export Destinations, 2024
Source: ITC Trade Map
India’s export landscape has transformed since the 1990s, marked by diversification
in both product composition and destination markets. While countries like the
Netherlands have seen a rise in exports from India, the US and the UAE have
consistently remained India’s top export destinations since the early 2010s.
In 2024, India’s bilateral trade (merchandize) with the US reached USD 123.8 billion,
with a trade surplus of USD 37.7 billion for India. The US remains India’s largest export
market, accounting for 18.3% of total exports. From 2016 to 2024, India’s exports to
the US grew at a 7.5% CAGR, surpassing the global export growth rate. Despite global
disruptions, including the pandemic, exports to the US nearly doubled from USD 42.7
billion in 2014 to USD 80.8 billion in 2024, highlighting the US’s strategic importance
to India’s export growth.
15 https://dp.ashoka.edu.in/ash/wpaper/paper42_0.pdf 17Trade Watch October-December (Q3) FY25
Figure 20: India-US Merchandize Exports Triennium (2016-2024)46.6
58.4
78.915.9%
17.6%
17.9%
5%
8%
11%
14%
17%
20%
0
10
20
30
40
50
60
70
80
90
2016-18 2019-21 2022-24
Avg Vol of USA in India's exports to the World (USD bn)
Avg Share of USA in India's exports to the World (%)
Source: ITC Trade Map
Between 2022-24, India’s exports to the United States were dominated by high-value
sectors such as electrical machinery (HS 85), pharmaceuticals (HS 30), precious stones
and metals (HS 71), and mechanical appliances (HS 84), which together accounted
for ~43.5% of the total. In contrast, India’s global exports were led by mineral fuels (HS
27), comprising ~20% of the total.
Figure 22: Composition of India’s Export to
World, 2022-24
Figure 21: Composition of India’s Export to
US, 2022-24
Note: Figures represent share in the average export volumes over the specified period
Source: ITC Trade Map
HS 10 CerealsHS 71 Natural/Cultured Pearls
HS 27 Mineral Fuels, Mineral Oils and
Products of Their Distillation
HS 72 Iron and Steel
HS 29 Organic ChemicalsHS 73 Articles of Iron or Steel
HS 30 Pharmaceutical Products
HS 84 (Machinery, Mechanical Appliances,
Boilers; Parts Thereof)
HS 62 Articles of Apparel and Clothing,
Not Knitted or Crocheted
HS 85 Electrical Machinery and Equipment;
HS 63 Other Made-Up Textile Articles 18Trade Watch October-December (Q3) FY25
The US is a key market for several of India’s high-value and labour-intensive exports,
absorbing a significant share of global shipments in select categories. In 2024, the
US accounted for over 30% of India’s global exports in electrical machinery (HS 85),
gems and jewellery (HS 71), and pharmaceuticals (HS 30). Notably, labour-intensive
sectors such as apparel (HS 61, 62) and made-up textiles (HS 63) also recorded a high
US share—ranging from 31% to nearly 49%—underscoring the strategic importance
of the US as both a scale and value-driven market for India’s export basket.
Figure 23: India’s Exports to the US as % of Total Exports to the World48.8%
38.0%
34.4%
31.6%
31.3%
31.1%
29.4%
20.2%
12.4%
12.1%
5.8%
63 Other made-up textile articles; sets
30 Pharmaceutical products
61 Articles of apparel and clothing
accessories, (knitted)
62 Articles of apparel & clothing (not
knitted)
85 Electrical machinery & equipment
71 Natural or cultured pearls
73 Articles of iron or steel
84 Nuclear reactors & boilers
29 Organic chemicals
87 Vehicles other than railway & parts
27 Mineral fuels, mineral oils & products
Source: ITC Trade Map
Overall, the United States has emerged as a central pillar in India’s export strategy,
accounting for nearly one-fifth of total exports and offering deep market access
across high-value and labour-intensive sectors. The diversity of India’s export basket
from advanced electronics and pharmaceuticals to textiles and apparel, reflects the
maturity and potential of this bilateral trade relationship. With the shared objective
of reaching USD 500 billion in bilateral trade by 2030
16
and ongoing efforts toward
a comprehensive Bilateral Trade Agreement, the India-US trade corridor is poised
for further expansion. While the US-India defence partnership has flourished,
the bilateral economic relationship is also deepening through growing trade and
investment ties.
Global Trade: A Critical Engine Under Strain
The persistent and widening US trade deficit was a key precursor to the tariffs
introduced in April 2025. Over the past decade, the composition of the deficit has
shifted notably: China holds a significant share, though declining from 47.8% in 2015
to 24.6% in 2024, while Vietnam’s rose from 3.3% to 10% and Mexico’s from 7.2% to
13.6%. India’s share remained modest, averaging 3.2% over the last ten years.
16 https://pib.gov.in/PressReleasePage.aspx?PRID=2116613 19Trade Watch October-December (Q3) FY25
Figure 24: Composition and Trend of US Trade Deficit USD Billion (2014-2024)
Note: Rest of the world excludes trade deficit of India, China, Mexico, Vietnam and Canada
Source: ITC Trade Map
The proposed U.S. tariffs in 2025 could impact trade flows, including a 10% baseline
tariff on all imports and higher tariffs on specific sectors. The WTO reports that new
import-restrictive measures covered $611 billion (not cumulative) in global trade for
Oct 2023- Oct 2024 alone. These global challenges are intensified by a growing trend
toward economic fragmentation and increasing unpredictability in trade policies.
The ripple effects extend across both advanced and emerging economies. The World
Trade Organisation (WTO) projects a contraction of 0.2% in global merchandise
trade in 2025, reversing the modest 2.9% growth recorded in 2024. Trade policy
uncertainty has reached historic highs, as noted by the Economic Policy Uncertainty
Index, which in early 2025 surpassed peaks last seen during the 2008 financial crisis
and the COVID-19 pandemic. The OECD’s Trade Policy Uncertainty (TPU) Index,
which measures the frequency of articles discussing trade policy uncertainty, also
reached record highs in early 2025, indicating heightened concerns over trade policy
unpredictability. UNCTAD forecasts global GDP growth at just 2.3% in 2025, below
the 2.5% threshold typically associated with a worldwide recession, reflecting eroded
investor confidence and deferred business investment. Simultaneously, global
value chains (GVCs) are being reconfigured. The trend toward “Friendshoring” and
“Reshoring” prompted by the pandemic and escalating geopolitical risk has shifted
investment away from China to Southeast Asia, Mexico, and Eastern Europe.
Despite several headwinds, global trade remains essential. For developed economies,
it drives innovation, efficiency, and access to diverse markets. For developing
countries, trade offers critical opportunities for growth, income convergence, and
integration into global value chains. Countries such as India may gain export share
through trade diversion, benefiting from the restructuring of global supply chains.
However, persistent fragmentation threatens to undermine these benefits. The
urgent priority is strengthening multilateral cooperation, reducing uncertainty,
and building more inclusive, resilient trade systems—failure to do so risks reversing
decades of progress in global development and integration. 20Trade Watch October-December (Q3) FY25
1. Impact of the Current US Tariffs on India
Prior to realignment of tariff in 2025, an assessment of US tariffs on Indian exports
indicates that while India faced slightly higher Weighted Average Tariff (calculated
as per WITS 2022 applied tariff rates) compared to other top global exporters, these
differences were relatively marginal and often reflective of product-specific trade
dynamics. At the HS 2 level, covering the top 30 traded product categories, India
did experience moderately higher average tariffs than many of its peers. However,
it is essential to note that China, the leading supplier in 10 of these 30 categories,
consistently faced higher tariff barriers across most of its top exports.
The trend remained consistent at the more detailed HS 4 level, with India
encountering a weighted average tariff approximately 1.9% higher than the average
faced by other major exporters. China faced higher tariffs in most categories, while
Vietnam also faced higher tariffs in select segments, including HS6403 (footwear),
HS6105 (men’s shirts), and HS6104 (women’s suits).
Figure 25: Tariff by the USA before 2025
Differential Tariff= Tariff on Competitor-Tariff on India
Assumptions for the analysis
●The US has imposed a 10% additional baseline tariff
17
on imports from all
countries except Mexico and Canada. Further, the latest tariff imposed on
other countries as on 10
th
July’ 2025 have been considered.
●Imports from Mexico and Canada are subject to a higher tariff of 25%
18
and
35% respectively, while imports from China face an additional higher tariff
of 30% (20%: tariffs imposed in February’25
19
+10%: baseline tariff).
17 https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-
rectify-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-defi-
cits/
18 https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-proceeds-with-
tariffs-on-imports-from-canada-and-mexico/
19 https://www.whitehouse.gov/presidential-actions/2025/03/further-amendment-to-duties-addressing-the-
synthetic-opioid-supply-chain-in-the-peoples-republic-of-china/ 21Trade Watch October-December (Q3) FY25
●In the analysis, products receiving differential treatment are categorized
accordingly:
◊ Electrical machinery (HS 85), Natural, cultured pearls and diamonds
(HS 71) and Plastics and articles thereof (HS 39) face a tariff of 10%,
with exemptions applied at the HS 4 level as only few categories are
exempted.
20
◊ Organic Chemicals (HS 29), Pharmaceutical products (HS 30) and
Mineral fuels and their products (HS 27) are exempted from tariff both
at HS 2 and HS 4 level as large number of categories are exempted.
◊ Vehicles and parts thereof (HS 87) face a tariff of 25% under Section
232.
21
◊ Steel
22
and aluminum
23
(classified under HS 73, HS 76) are subject to
existing tariffs of 50% under Section 232.
i. Snapshot of the Analysis: The table below provides an analysis of India’s export
performance (to the US) at two levels—HS 2 and HS 4. At the HS 2 level, 91.4%
of India’s total exports to the US are analysed, with India expected to gain in
22 out of 30 products analyzed, corresponding to a substantial gain with 61% of
exports to the US. These products also represent 68% share in total US imports,
indicating high importance in global trade. Meanwhile, HS 4-level analysis offers
a more granular view, identifying 78 products with potential gains, with the
share of these exports to the US (where India can gain) at 52%. The data suggests
strong growth opportunities in targeted product categories while highlighting
areas where India’s export status is expected to remain unchanged. (Table 3)
Table 3: Analysis at HS 2 and HS 4 level
HS
Codes
No of
Products
Analyzed*
% Share
in India's
Total
Exports
to US
Products
where
India will
Gain
% Share of
Exports to
US where
India will
Gain
% Share
of
product
in total
US
imports
Products
where
Status
Quo
remains
% Share of
Exports to
US where
Status Quo
remains
HS 2 30
91.4%
(73.9
USD
Billion)
22
61%
(49.3 USD
Billion)
68%
(2285.2
USD
Billion)
6
32.8%
(26.5 USD
Billion)
HS 4 100
82%
(66 USD
Billion)
78
52%
(42 USD
Billion)
26%
(873
USD
Billion)
17
28%
(22 USD
Billion)
*Data was not available for 2 HS2 products and 5 HS4 products
20 https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-recti-
fy-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-deficits/
21 https://www.whitehouse.gov/presidential-actions/2025/04/amendments-to-adjusting-imports-of-auto -
mobiles-and-automobile-parts-into-the-united-states/
22 https://www.federalregister.gov/documents/2025/02/18/2025-02833/adjusting-imports-of-steel-into-the-
united-states
23 https://www.federalregister.gov/documents/2025/02/18/2025-02832/adjusting-imports-of-aluminum-in -
to-the-united-states 22Trade Watch October-December (Q3) FY25
ii. Analysis of Differential Tariff: India maintains a relatively strong and competitive
position in the US market despite facing marginally higher tariffs.
Analysing the top 30 product categories at the HS 2 level reveals insights into
India’s tariff positioning in the US market. Tariffs on the competitors are higher
than India’s in 22 out of these top 30 products. In 6 of the top 30 categories, India
faces slightly higher average tariffs, up to 3%, than other leading exporters with
majority of them with marginally higher between 0-2%. These specific product
categories account for over 12% of total US imports, underscoring the scale of
opportunity available for Indian exporters. Additionally, these differences are
modest and present a strategic opportunity for India to engage in targeted
negotiations with the United States. (Table 4)
More notably, India enjoys a competitive edge over China in several key sectors.
The average tariff differential between Indian and Chinese exports is 20.5% in
India’s favour. By leveraging its comparatively lower tariff burden, especially in
contrast to China, India is well-positioned to gain market share.
Table 4: Tariff difference at HS 2 for Top 30 products (covering 91% of India’s Exports to the US)
between Competitor and India
Scenario 1: Tariff Applied on India is higher than
competitor
Scenario 2: Tariff Applied on competitor is higher
than India
Particu-
lars (Tariff
difference
between
Competitor
and India)
No. of
prod-
ucts
% Share in
India's total
exports to US
% share of
the prod-
uct in total
US imports
Particu-
lars (Tariff
difference
between
Competitor
and India)
No. of
prod-
ucts
% Share in
India's to-
tal exports
to US
% share of
the product
in total US
imports
0-1% 1 11.0% 6.0% 0-20% 7 32.0% 40.0%
1-2% 4 16.9% 6.0% >20% 15 28.9% 28.0%
2-3% 1 1.5% 0.0% - - - -
Total 6
29.4%(23.7
USD bn)
12%(424
USD bn)
22
61%(49.3
USD bn)
68%(2285.2
USD bn)
Source: ITC Trade Map
An analysis of tariff data at the HS 4 level across the top 100 products reveals that in
80 products, competitors face higher tariffs than India. These products represent
a significant portion of India’s export basket to the US and total US imports,
highlighting substantial opportunities for India to expand its market presence.
Even in scenarios where India faces higher tariffs, the tariff differential is minimal,
typically less than 1%, in products that accounts for 24.5% of India’s exports to the
US This narrow gap reduces the competitive disadvantage and reinforces India’s
favourable positioning, especially as major exporters like China continue to face
higher trade barriers. (Table 5) 23Trade Watch October-December (Q3) FY25
Table 5: Tariff difference at HS 4 for Top 100 products (covering 82% of India’s Exports to the US)
between Competitor and India
Scenario 1: Tariff Applied on India is higher than com-
petitor
Scenario 2: Tariff Applied on competitor is higher than India
Particulars
(Tariff differ-
ence between
Competitor
and India)
No. of
prod-
ucts
% Share in
India's total
exports to
US
% share
of the
product
in total
US im-
ports
Particulars
(Tariff differ-
ence between
Competitor and
India)
No. of
products
% Share in
India's total
exports to
US
% share of
the product
in total US
imports
0-1% 8 24.5% 5.2% 0-15% 28 10.3% 9.0%
1-2% 0 0.0% 0.0% 15-25% 44 70.9% 29.0%
2-3% 1 0.3% 0.04% >25% 8 7.7% 2.3%
>3% 6 2.2% 0.6% - - - -
Total 15 27.04% 5.79%80 88.95% 40.32%
Source: ITC Trade Map
iii. Top HS 2 products analysis where India will gain competitiveness
China, Canada, and Mexico are the leading exporters to the US in these categories;
therefore, higher tariffs on these countries will improve India’s competitiveness.
For the top 10 products, the tariff differential of the competing countries against
India is higher on the competitor at an average rate of 19.6%. Despite some
categories having a smaller current footprint, the imposed tariff disadvantages
on competitors allow India to expand exports. (Table 6)
Table 6: Top HS 2 products where India will gain competitiveness
Tariff Differential= Tariff on Competitor-Tariff on India
HS2
Chap-
ter
Product
Label
Top Ex-
porting
Coun-
try to
US
Tariff
Dif-
fer-
en-
tial
Top
Coun-
try’s
total ex-
ports to
US of the
product
(USD
billion)
Top
Coun-
try’s %
Share
in
Total
US Im-
port
India’s
total ex-
ports to
the US
of the
product
(USD
billion)
In-
dia’s
%
Share
in To-
tal US
Im-
port
% Share
of the
product
in total
import of
US
% Share in
India’s To-
tal Exports
to US
3,359
USD bil-
lion (To-
tal-All )
81 Billion
(Total - to
US)
'85 Electrical
machinery
& equip-
ment &
parts
China 19.3% 127.1 26% 12.6 2.6% 14% 15.6%
'84 Nuclear
reactors,
boilers,
machinery &
parts
Mexico13.7% 105.8 20% 6.6 1.2% 16% 8.1%
'27 Mineral
fuels, min-
eral oils &
products
Cana-
da
29.8% 131.0 52% 4.4 1.8% 7% 5.5% 24Trade Watch October-December (Q3) FY25
HS2
Chap-
ter
Product
Label
Top Ex-
porting
Coun-
try to
US
Tariff
Dif-
fer-
en-
tial
Top
Coun-
try’s
total ex-
ports to
US of the
product
(USD
billion)
Top
Coun-
try’s %
Share
in
Total
US Im-
port
India’s
total ex-
ports to
the US
of the
product
(USD
billion)
In-
dia’s
%
Share
in To-
tal US
Im-
port
% Share
of the
product
in total
import of
US
% Share in
India’s To-
tal Exports
to US
'73 Articles of
iron or steel
China20.3% 13.2 25% 3.0 5.6% 2% 3.7%
'63 Other
made-up
textile arti-
cles
China 22.1% 9.4 52% 2.9 16.3% 1% 3.6%
'87 Vehicles
other than
railway &
parts
Mexico23.9% 137.2 35% 2.7 0.7% 12% 3.3%
'62 Articles of
apparel &
clothing
accessories
(not knitted)
China 19.8% 7.8 21% 2.6 7.1% 1% 3.2%
'61 Articles of
apparel &
clothing
accessories
(knitted)
China 21.5% 10.6 22% 2.6 5.5% 1% 3.2%
'03 Fish &
crustaceans
& other
aquatic in-
vertebrates
Cana-
da
24.9% 3.4 16% 2.0 9.4% 1% 2.4%
'39 Plastics
& articles
thereof
China 19.9% 21.5 28% 1.6 2.1% 2% 2.0%
Total
19.6
(Av-
er-
age)
40.957% 50.7%
Source: ITC Trade Map
iv. Top HS 2 products analysis where India’s competitiveness may be unchanged
Out of the top 30 products analysed, 6 have higher tariffs for India than the
competitor/top exporter. Even after the tariffs, India remains competitive mainly
across these products, as shown below. The competitors vary for these sectors.
They are characterized by minimal or negative tariff differentials, with an average
tariff disadvantage of 1%, suggesting further scope for tariff-led export growth.
Collectively, these product categories account for 12.6% of total US imports of the
goods and represent 29.3% of India’s total exports to the US, underscoring their
strategic importance.
India has established strong market positions in select segments, such as carpets,
textile floor coverings, and pearls, reflecting historical strength and brand value.
Though tariff incentives are absent, these sectors offer further growth potential,
provided India enhances its competitiveness through other means. India’s 25Trade Watch October-December (Q3) FY25
future export strategy in these sectors must also capture non-tariff levers such
as innovation, quality upgradation, value addition, and deeper bilateral trade
engagements to maintain and enhance its market share. (Table 7)
Table 7: Top HS 2 products where India’s competitiveness will remain unchanged
Tariff Differential= Tariff on Competitor-Tariff on India
HS2
Chap-
ter
Product Label Top Ex-
porting
Country
to US
Tariff
Differ-
ential
Top Country’s
total exports
to US of the
product (USD
billion)
Top
Country’s
% Share in
Total US
Import
India’s total
exports to
the US of
the product
(USD billion)
India’s
% Share
in Total
US
Import
% Share
of the
product
in total
import
of US
% Share in
India’s Total
Exports to
US
'71
Natural or
cultured
pearls,
precious or
semi-pre-
cious stones
Swit-
zerland
-1.7% 15.0 17% 9.3 10.4% 2.7% 11.5%
30*Pharmaceuti-
cal products
Ireland 0.0% 50.3 24% 8.9 4.2% 6.3% 11.0%
'29 Organic chem-
icals
Ireland -1.1% 25.7 36% 2.6 3.7% 2.1% 3.2%
'38Miscellaneous
chemical
products
Germa-
ny
-1.3% 3.3 14% 1.3 5.2% 0.7% 1.6%
'57Carpets & oth-
er textile floor
coverings
Türkiye-2.9% 0.9 24% 1.2 33.0% 0.1% 1.5%
'33Essential oils
& resinoids;
perfumery
France -1.4% 4.4 19% 0.5 2.1% 0.7% 0.6%
Total
1
(Aver-
age)
23.712.6% 29.3%
Note: * Tariff differential is 0 as these chapters have been exempted from tariffs (refer to assumptions)
Source: ITC Trade Map
v. Top HS 4 products analysis where India will gain competitiveness
Out of the top 100 products analysed at the HS 4-digit level, 78 products,
representing 52% of India’s total exports to the US and accounting for a 26% share
in total US imports, are expected to see improved competitiveness for India. Of
these 78 products, China is the top exporter to the US in 34 products. Although
India’s share in these product categories is smaller than China’s, this gives India
a huge opportunity in the US market. The table below highlights key product
categories at the HS4 level where India demonstrates a strong export presence
in the US market and benefits from a favourable tariff differential relative to
major competitors. These product lines account for 22% of India’s total exports
to the US, with an export value of USD 17.66 billion. High tariff differentials,
particularly in sectors such as 63 (Other made-up textile articles), 85 (Electrical
machinery and equipment) and 84 (Nuclear reactors, machinery & parts), where
competitors face higher tariffs, present India with opportunities to strengthen
its market position. India’s sizeable export share underscores its competitiveness
in strategically important segments even in categories where the tariff gaps are
more moderate. (Table 8) 26Trade Watch October-December (Q3) FY25
Table 8 : Top HS 4 products where India will gain competitiveness
Tariff Differential= Tariff on Competitor-Tariff on India
HS4
Chap-
ter
Product
Label
Top
Ex-
port-
ing
Coun-
try to
US
Tariff
Differ-
ential
(Com-
petitor
vs
India)
Top coun-
try's total
exports to
the US of
the prod-
uct (USD
billion)
Top
Coun-
try’s %
Share in
Total US
Import
India's
total
exports
to the
US of
the
prod-
uct
(USD
billion)
In-
dia’s
%
Share
in
Total
US
Im-
port
%
Share
of the
prod-
uct in
total
import
of US
%
Share
in
India’s
Total
Ex-
ports
to US
85 (Electrical machinery and equipment)
8517
Telephone sets,
incl. smart-
phones and
other
China 20.0% 51.5 45% 7.32 6.4% 3.0% 9.1%
8541*
Semiconductor
devices
Viet-
nam
0.0% 5.8 25% 1.52 6.6% 1.0% 1.9%
84 (Nuclear reactors, machinery & parts)
8483
Transmission
shafts
China 20.6% 1.42 12.5% 1.04 9.1% 0.3% 1.3%
8411
Turbojets,
turbopropellers
and other gas
turbines
Canada 24.9% 6.13 19.8% 0.73 2.4% 0.9% 0.9%
27 (Mineral fuels)
2710Petroleum oils Canada 29.2% 12.9 22.0% 4.25 7.3% 1.7% 5.3%
73 (Articles of Iron and steel)
7308
Structures and
parts of struc-
tures
Mexico 25% 1.7 18% 0.69 7.5% 0.9% 0.9%
7307
Tube or pipe
fittings
China 5.2% 0.7 20% 0.52 15.6% 0.1% 0.6%
63 (Other made-up textile articles)
6302
Bedlinen, table
linen, toilet linen
and kitchen linen
China 21.0% 2.14 34% 1.30 20.9% 0.2% 1.6%
6305 Sacks and bags China 19.9% 0.11 15% 0.28 37.4% 0.02% 0.3%
Total
18.4%
(Average)
82.3917.668.2% 22.0%
Note: * Tariff differential is 0 as these categories have been exempted from tariffs (refer to assumptions)
Source: ITC Trade Map 27Trade Watch October-December (Q3) FY25
vi. Top HS 4 products analysis where India’s competitiveness will remain
unchanged
For 17 products, out of the top 100, (accounting for 28% of India’s exports to the US
and having 6.2% share in total US imports, India’s competitiveness may remain
unchanged due to minimal/ no change in the tariff differential between India
and the top exporter.
The table below highlights top product categories where India faces minimal
or no tariff disadvantage compared to key competitors, with an average tariff
differential of just 1.2%. These 7 together account for USD 18.5 billion in India’s
exports to the US, representing 23.1% of India’s total exports to the market. India has
secured a strong export share in some segments, especially in pharmaceuticals,
diamonds and other jewellery articles. These sectors reflect entrenched
competitiveness, driven by quality, pricing, and supply chain integration rather
than tariff advantages. (Table 9))
Table 9: Top HS 4 products where India’s competitiveness will remain unchanged
Tariff Differential= Tariff on Competitor-Tariff on India
HS4
Chap-
ter
Product Label
Top
Ex-
port-
ing
Coun-
try to
US
Tariff
Differ-
ential
(Com-
petitor
vs
India)
Top
coun-
try’s
total ex-
ports to
the US
of the
product
(USD
billion)
Top
Coun-
try’s %
Share
in
Total
US
Import
In-
dia’s
total
ex-
ports
to the
US of
the
prod-
uct
(USD
billion)
India’s
%
Share
in To-
tal US
Im-
port
%
Share
of
the
prod-
uct in
total
import
of US
%
Share
in
India’s
Total
Ex-
ports
to US
71 (Natural or cultured pearls)
7102 Diamonds,
whether or not
worked
Israel 0.0% 3.97 25.8% 4.85 31.8% 0.5% 6.0%
7113 Articles of jew-
ellery and parts
thereof
France -0.2% 1.87 12.8% 3.45 23.9% 0.4% 4.3%
HS 30 (Pharmaceutical Products)
3004* Medicaments
consisting
of mixed/
unmixed prod-
ucts
Swit-
zerland
0.0% 11.94 12.5% 8.51 9.1% 2.8% 10.6%
29 (Organic Chemicals)
2933 Heterocyclic
compounds
with nitrogen
hetero-atom-
[s]
Ireland 0.1% 5.42 43.6% 0.33 2.7% 0.4% 0.4%
2922 Oxygen-func-
tion ami-
no-compounds
Singa-
pore
-4.5% 0.6 30% 0.16 8.7% 0.1% 0.2% 28Trade Watch October-December (Q3) FY25
HS4
Chap-
ter
Product Label
Top
Ex-
port-
ing
Coun-
try to
US
Tariff
Differ-
ential
(Com-
petitor
vs
India)
Top
coun-
try’s
total ex-
ports to
the US
of the
product
(USD
billion)
Top
Coun-
try’s %
Share
in
Total
US
Import
In-
dia’s
total
ex-
ports
to the
US of
the
prod-
uct
(USD
billion)
India’s
%
Share
in To-
tal US
Im-
port
%
Share
of
the
prod-
uct in
total
import
of US
%
Share
in
India’s
Total
Ex-
ports
to US
38(Miscellaneous chemical products)
3808 Insecticides,
rodenticides,
fungicides,
herbicides,
anti-sprouting
products and
plant-growth ...
Germa-
ny
-0.1% 0.28 17.6% 0.81 51.5% 0.1% 1.0%
57 (Carpets and other textile floor coverings)
5702 Carpets and
other textile
floor coverings
Türkiye -3.4% 0.78 46.2% 0.39 23.3% 0.1% 0.49%
Total 1.2%
(Aver-
age)
24.8218.504.2% 23.1%
Note: * Tariff differential is 0 as these categories have been exempted from tariffs (refer to assumptions)
Source: ITC Trade Map
2. Policy Measures for Boosting Merchandise Trade
i. Enhancing Export Competitiveness
●To support MSMEs and boost export competitiveness, the government
could consider expanding Production-Linked Incentive (PLI) schemes
to include labour-intensive sectors such as leather, footwear, furniture,
and handicrafts. Currently, most PLI schemes are output-based and
not explicitly linked to exports. A Quality Upgradation Fund could be
established to incentivize MSMEs in meeting international quality
benchmarks, certifications, and sustainability requirements.
●Rationalising electricity tariffs by reducing cross-subsidisation for
industrial users and promoting renewable energy adoption could help
lower operational costs and enhance the global competitiveness of Indian
manufacturers.
●Deepening India’s financial markets is key to improving MSME and
startup credit access. This can be achieved by expanding funding sources,
strengthening bond markets, integrating fintech, and enhancing credit
guarantees. Promoting instruments like green and sustainability-linked
bonds with targeted incentives will boost liquidity and lower borrowing
costs. 29Trade Watch October-December (Q3) FY25
ii. Trade Facilitation and Market Access
●To strengthen India’s export ecosystem, several targeted measures can
enhance efficiency and competitiveness. Improving the Authorised
Economic Operator (AEO) Program through better inter-agency
recognition, clearances, monitoring, and mutual recognition agreements
will boost its adoption and impact. Extending deferred duty payment
benefits beyond AEO clients to trusted MSMEs and regular importers
under risk-managed criteria can reduce clearance delays and improve
operational fluidity. Export incentive structures also require recalibration.
●Launching targeted schemes under the Export Promotion Mission, with
flexible incentives and a more focused RoDTEP mechanism, can support
SME competitiveness. Also, short-term credit measures, such as raising
the interest equalization rate for MSME exporters to 5% for 12–18 months,
would help ease liquidity pressures and sustain export momentum.
●Easing export bill compliance for small exporters, by reducing bank
fees, simplifying documentation for shipments under $1000, and easing
penalties, can lower transactional burdens for MSMEs with limited export
volumes but strong compliance records.
●Building a digital-ready trade framework is essential for lowering
transaction costs and enabling faster clearances. India should fast-track
cross-border paperless trade systems with trusted partners, supported
by clear regulations on digital transactions, data flows, and cybersecurity.
Strengthening digital trade platforms and ensuring reliable digital
customs infrastructure are key. The UNESCAP Framework and initiatives
like the India-Korea Electronic Origin Data Exchange System (EODES)
offer strong foundations, though full implementation requires resolving
technical issues. Broader engagement through frameworks like Cross-
border Paperless Trade in Asia and the Pacific (CPTA) can further scale up
paperless trade.
iii. Diversify Trade Partners and Agreements, and be part of bigger supply
chains and production structures
●India should focus on diversifying its trade partners and becoming integral
to larger global supply chains and production networks. Fast-tracking free
trade agreements, particularly the India-EU FTA, with a clear, time-bound
negotiation roadmap, is essential. These agreements should prioritise the
reduction of non-tariff barriers and facilitate smoother trade in services,
a key strength for India. Simultaneously, deeper trade engagement with
countries such as Australia, Japan, South Korea, and ASEAN nations can
be highly beneficial, especially in sectors where India’s export strengths,
such as pharmaceuticals, automobiles, and IT, match their import needs.
Additionally, pivoting towards African markets by developing a structured
India-Africa trade corridor focused on pharmaceuticals, education services,
IT, and cost-effective machinery will tap into the growing demand and
expand India’s export footprint into emerging regions. 30Trade Watch October-December (Q3) FY25
iv. Ease of Doing Business and Factor market reforms
●Factor market reforms are essential for boosting investment and
industrial competitiveness. The expedited release of Jan Vishwas 2.0 is also
important, as it can streamline legal processes by reducing litigation time
and costs, while introducing civil penalties and administrative actions for
minor lapses to enhance regulatory efficiency.
●Restrictive building regulations, such as setbacks, mandatory parking,
and limits on ground coverage, often result in factories losing over half
their land, curbing efficient land use and vertical expansion. Reforming
these rules would lower the cost of land and promote more productive
industrial development.
3. Policy Measures for Boosting Services Trade
i. Negotiate a Services-Focused FTA or Chapter: Building on the model of the
India–UK agreement, India should pursue a services-oriented trade deal with
the US, placing strong emphasis on key sectors such as information technology,
financial services, professional services, and education. The agreement should
include robust provisions for digital trade, creating a framework for enhanced
cross-border service delivery.
ii. Ease Mobility and Visa Access: India must advocate for improved visa access
for its professionals, particularly under H-1B and L-1 categories. This should
include provisions for intra-corporate transferees and independent service
providers, which are crucial for maintaining India’s competitive edge in the
global services industry.
iii. Expand Digital and Remote Service Access: With growing global demand
for DDS, India should seek firm market access commitments from the US in
high-growth areas such as cybersecurity, artificial intelligence, telecom, and
design services. Leveraging India’s strengths in these sectors can help increase
bilateral trade and innovation-led growth.
iv. Licensing and Regulatory Compliance: Regulatory barriers such as
inconsistent data compliance and intellectual property concerns hinder Indian
service exports. Joint efforts between India and the US are needed to simplify
licensing procedures and address cross-border data flow issues, enabling
smoother market access for Indian firms.
v. Strengthen Mutual Recognition Agreements (MRAs): To expand professional
opportunities, India should push for broader MRAs that cover a wider range
of professions, including engineers, architects, and healthcare workers. These
agreements would streamline certification processes and facilitate the mobility
of Indian professionals to the US.
vi. Promote Innovation and Skill Development: Investing in upskilling and
technology adoption is essential to meet the evolving demands of the US
services sector. India should focus on emerging domains such as digital health,
fintech, cloud computing, and ed-tech, ensuring that its service offerings are
competitive in quality, innovation, and price. 31Trade Watch October-December (Q3) FY25
C.
POLICY AND
GEOPOLITICAL
HIGHLIGHTS 32Trade Watch October-December (Q3) FY25
C. Policy and Geopolitical Highlights
1. Global Trade–Related Policy Updates for India’s Major Partners
i. United States: In April 2025, the US introduced a baseline 10% tariff on all imports,
with new tariffs on imports from countries such as Canada, Japan, South Korea,
Malaysia, Thailand, and Brazil ranging between 20% to 50%. India’s relatively low
exposure created room for gains in key sectors like pharmaceuticals, electrical
machinery, and textiles. Separately, India and the United States are engaging in
negotiations for a Bilateral Trade Agreement (BTA), aiming to enhance market
access and reduce trade barriers.
ii. United Kingdom: The India–UK Free Trade Agreement (FTA) was successfully
concluded on May 6,2025 after 13 rounds of negotiations, marking a significant
milestone in bilateral trade relations. The agreement eliminates tariffs on
approximately 99% of Indian exports, with particular benefits for key sectors such
as textiles, leather, and automotive components. The deal was widely celebrated
in the UK Parliament, where it was hailed as a “landmark win” for both nations,
reflecting its potential to boost trade volumes, job creation, and economic
collaboration.
In parallel, the UK’s formal accession to the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) in December 2024 further
strengthens the trade landscape. This development is expected to facilitate
smoother integration of supply chains and grant Indian exporters indirect access
to CPTPP member markets through third-party arrangements.
iii. Australia: India and Australia are advancing efforts to upgrade their interim
Economic Cooperation and Trade Agreement (ECTA) into a full Comprehensive
Economic Cooperation Agreement (CECA). Since its signing in April 2022, the
ECTA has led to tariff removals on nearly all goods, setting a robust foundation
for deeper integration. Negotiations are currently focusing on expanding
cooperation in renewable energy components, digital services, and the removal
of behind-the-border barriers, including non-tariff issues in agriculture, technical
standards, and rules of origin.
2. India’s Trade Policy Developments (Oct 2024–Jun 2025)
i. Rice Export Liberalisation: In March 2025, India lifted the remaining restrictions
on 100% broken white rice exports, marking an important policy shift. This
decision was driven by a strong rise in domestic buffer stocks, which reached 59.5
million tonnes. The surplus enabled India to resume as a key supplier to African
and Asian markets, strengthening food security partnerships and supporting
global rice availability after previous export curbs.
ii. Trade Agreements in the pipeline: India is advancing a broad set of trade
and investment agreements to strengthen its global economic footprint. It is
currently negotiating over seven Free Trade Agreements (FTAs), including with
Oman, Peru, Sri Lanka, and Canada. These efforts aim to enhance market access,
diversify export destinations, and deepen integration with key regions across the
Gulf, Latin America, and North America. In parallel, India is also reassessing its
Bilateral Investment Treaties (BITs) to improve investor protection and attract
sustained capital inflows. 33Trade Watch October-December (Q3) FY25
iii. A major milestone in this strategy was signing the Trade and Economic
Partnership Agreement (TEPA) with the European Free Trade Association (EFTA)
comprising Switzerland, Norway, Iceland, and Liechtenstein in March 2024. The
pact, expected to come into force by September 2025, promises USD 100 billion
in investments over 15 years, focused on manufacturing, innovation, and skill
development. Recent updates indicate that Switzerland’s ratification process will
conclude by July 2025, after which full implementation will follow.
3. Geopolitical Developments
i. Red Sea Crisis and India-Middle East-Europe Economic Corridor (IMEC)
Momentum
24
: Announced at the G20 Summit in 2023, the India-Middle East-
Europe Economic Corridor (IMEC) has gained strategic importance as an
alternative to China’s Belt and Road Initiative. Connecting India to Europe via the
UAE, Saudi Arabia, Jordan, and Israel, IMEC is designed to offer a reliable trade
and energy route that reduces congestion in the Suez Canal while enhancing
regional connectivity. Since late 2024, attacks on commercial vessels in the Red
Sea have disrupted Suez Canal trade, accelerating interest in fast-tracking IMEC.
India is expected to invest in freight infrastructure along this corridor, making
IMEC a cornerstone of its long-term trade strategy and regional economic
cooperation.
ii. 18
th
G20 Leaders’ Summit – Brazil: The 18
th
G20 Summit, held in Brazil in
November 2024, underscored the need for collective action to ensure resilient
global supply chains, especially in the wake of trade disruptions caused by
geopolitical tensions. Brazil, as G20 chair and incoming BRICS president for
2025, positioned itself as a voice for the Global South, calling for inclusive trade
policies, support for developing countries’ digital trade readiness, and a global
compact on de-risking supply chains. The summit also featured debates over the
fragmentation of international trade governance, with sharp divergences over
climate-linked trade measures and digital services taxation
iii. G7 Summit 2025- Canada: The 51
st
G7 Summit 2025 in Canada
25
is a key platform
for India to engage with leading global economies, highlighting its growing
influence. As a guest, India contributed to trade, climate, and security discussions,
deepening ties with major trade and investment partners. The summit supported
India’s climate goals through talks on financing and technology transfer, while
enhancing Indo-Pacific security and counter-terrorism cooperation. India’s active
role in digital governance discussions helped strengthen its digital economy in
line with global standards and also led to the resumption of India-Canada FTA
discussions.
4. Commodity Price Trends (Apr 2024–May 2025)
As 2025 commences, commodity markets are expected to confront a complex
landscape shaped by geopolitical developments, economic policy shifts, and evolving
demand patterns. For India and other emerging economies, these dynamics present
challenges and opportunities, necessitating vigilant monitoring and adaptive
strategies to manage trade implications effectively.
24 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2122299#:~:text=Highlighting%20its%20poten -
tial%20reach%2C%20Shri,energy%20infrastructure%2C%20including%20undersea%20cables.
25 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2134644 34Trade Watch October-December (Q3) FY25
According to the IMF Commodity Price Index data till May’25, commodity markets
show divergent trends across key segments. The All-Commodity Index stood at 166.63
in Dec’24, a 4.5% increase from 159.53 in Dec’23. It, however, declined to 160.92 in
May’25. The overall decline in the All-Commodity Index reflects broad-based easing
in energy and metals markets, driven by increased global supply, weak industrial
demand, and shifting macroeconomic conditions, including tighter monetary
policy and slower-than-expected growth in major economies due to rising policy
uncertainty.
Figure 26: Price indices across key commodity indices100
120
140
160
180
200
220
240
260
All commodity indexAPSP crude oil($/bbl)Food index
Coal indexMetal indexPrecious Metals Price Index
Source: IMF
Crude oil Index has been declining in the past nine months, down from 179.28 in
Oct’24 to 150.37 in May’25 per barrel, due to a mix of supply curb interventions and
growing output from non-OPEC players. However, given the conflict in West Asia, it
is expected to surge.
Coal Prices Index, though volatile during the period, ended May’25 at 138.87, reflecting
a decline from 194.93 in October ’24. After a temporary surge in October due to rising
power sector demand in Asia driven by China and India, prices softened as inventory
buffers improved and demand outlook weakened, with the energy transition gaining
traction in developed and emerging markets alike.
26
The Metals Price Index recorded a 4.7% decline year-on-year, from 191.04 in Dec’2023
to 182.08 in Dec’2024. It further declined to 179.14 in May’25. The decrease stemmed
from weaker-than-expected demand from China’s real estate sector with an
exception for copper. Demand outside China also continued to remain subdued;
however, the future outlook is positive because of the rising demand for clean
technology, which has contributed to the rise in demand for some metals such as
copper, tin, and nickel.
27
In contrast, the Precious Metals Price Index rose sharply by 27.7% Year-on-year, from
159.54 to 203.73 in December ’24, having touched record highs in October ’2024. It
reached 250.54 in May’25. The rally was fueled by gold purchases reaching a record
high in October and platinum prices due to rising demand for gold during periods
of uncertainty.
28
26 https://blogs.worldbank.org/en/opendata/international-coal-price--higher-for-longer
27 https://blogs.worldbank.org/en/opendata/metal-prices-set-to-remain-high-in-2024-25
28 https://blogs.worldbank.org/en/opendata/precious-metals-surge-to-all-time-highs 35Trade Watch October-December (Q3) FY25
D. APPENDIX
HS Codes Classification as per Technology Intensity
Low-Technology
29
: Agro-Based, Natural Resource & Traditional Manufactures
This category captures the core sectors represented by HS Chapters 01-24
(agriculture, food and beverages), 32, 41-46 (animal products, leather, wood and
related manufactures), 47-49 (paper and printed materials), and 50-58 (textiles
and traditional fibres), reflecting a focus on primary products, resource-based
goods, and traditional industries.
Medium-Low-Technology
30
: Industrial Materials, Base Metals & Consumer
Manufactures
This category captures the core sectors represented by HS Chapters 25-27
(minerals and fuels), 35, 36, 39 and 40 (industrial chemical derivatives), 66-71
(miscellaneous and mineral-based manufactures), 72- 83 (base metals and
metal articles), and 91-96 (consumer and miscellaneous manufactured goods) .
Medium-High-Technology
31
: Chemical Products, Transport Equipment &
Precision Instruments
This category captures the core sectors represented by HS Chapters 28-30, 31, 33-
34, and 38 (chemical products), Chapters 86-87, and 89 (transport equipment),
and Chapter 90 (precision instruments).
High-Technology
32
: Advanced Electronics, Machinery, Aerospace & Defense
Equipment
This category captures the core sectors represented by HS Chapters 37, 84, 85,
88, and 93.
29 Industries that use well-known, stable technologies. These don’t need much R&D or highly skilled labour
and often compete mainly on cost.
30 Industries with simpler technologies and less R&D, focused more on improving production processes.
Often includes basic manufacturing sectors.
31 Industries that use complex machinery and tools, with a fair amount of R&D and skilled labour. They are
common in areas like engineering and automotive.
32 Industries that use very advanced and fast-changing technologies. They rely heavily on R&D, skilled work-
ers, and strong links with research institutions. 36Trade Watch October-December (Q3) FY25
Contributors
Dr. Pravakar SahooProgramme Director, NITI Aayog
Shri Amit VermaDirector, NITI Aayog
Ms. Jyotika NagvanshiDeputy Director, NITI Aayog
Ms. Mala ParasharConsultant-I, NITI Aayog
Ms. Pooja Teotia, CFAConsultant-I, NITI Aayog
Dr. Apica SharmaConsultant-I, NITI Aayog
Ms. Abhilasha MandaConsultant-I, NITI Aayog
Ms. Salome Sara PhilipsYoung Professional, NITI Aayog
Ms. Riya JindalYoung Professional, NITI Aayog
Ms. Kavya RaoYoung Professional, NITI Aayog
We would like to thank Ms. Komal Kanwar Shekhawat for her contributions to the
inaugural edition (Q1 FY25) of the Trade Watch Quarterly. Notes 39Trade Watch October-December (Q3) FY25

Trade Watch- Quarterly (October - December [Q3] FY25)