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1Trade Watch April-June (Q1) FY25 1
Trade Watch April-June (Q1) FY25
April-June (Q1) FY25
TRADE WATCH
QUARTERLY 2Trade Watch April-June (Q1) FY25 5Trade Watch April-June (Q1) FY25 6Trade Watch April-June (Q1) FY25 7Trade Watch April-June (Q1) FY25 8Trade Watch April-June (Q1) FY25 10Trade Watch April-June (Q1) FY25 12Trade Watch April-June (Q1) FY25 iTrade WatcJBApril-June (Q1) FY25
Executive Summary
The impact of international trade on development outcomes have intensified as it
has been proven that cross border trade is correlated with rising living standards and
poverty reduction
1
.
India’s trade landscape is rapidly evolving in response to global challenges and
opportunities. In this context, the Trade Watch Quarterly Report Q1’FY25 offers a
comprehensive analysis of India’s trade performance, assessing trade dynamics,
identifying potential sectors and key markets while also analysing the impact of
geopolitical tensions.
India’s total trade in H1 2024 reached $576 billion. However, the current account
balance shifted to a $9.7 billion deficit (1.1% of GDP) this quarter from US$ 8.9 billion
(1% of GDP) in Q1’FY24, driven largely by a widening merchandise trade deficit
2
.
The report highlights the resilience of India’s aggregate trade performance, which
depicts stability and a modest y-o-y increase. Imports in this quarter were primarily
driven by mineral fuels and electrical machinery, accounting for about 56%, while
exports mainly consist of mineral fuels and natural & cultured pearls, making up
approximately 45% with trade to top markets (15 countries) remaining stable.
India exhibits Trade Intensity Index (TII) score of greater than 1 with 84 countries
which accounted for 67% of its exports in 2023. Moreover, India shows a comparative
advantage (RCA > 1) in 43 commodities—representing 40% of global imports —which
constitute 68.2% of its goods export portfolio. The report also analyses commodities at
the HS-6 level to provide insights into potential product markets.
Finally, it identifies geopolitical opportunities and challenges posed to India’s trade
and particularly examines the potential impact of the Carbon Border Adjustment
Mechanism (CBAM).
1 https://www.wto.org/english/blogs_e/data_blog_e/blog_dta_24apr24_e.htm#:~:text=Increased%20trade%20
has%20coincided%20with,17%20to%2032%20per%20cent.
2 https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58783 iiTrade WatchBApril-June (Q1) FY25
ADVISORY BOARD
S. No.Board MemberAffiliation
1 Harsha Vardhana Singh Former Executive Director, Brookings India
2 Santosh Kumar Sarangi Additional Secretary & Director General, DGFT
3 Pravin Krishna Professor, 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 iiiTrade WatcJBApril-June (Q1) FY25
HIGHLIGHTS
1. India’s total trade in H1 2024 experienced a 5.45% y-o-y increase compared to 2023.
2. Merchandise imports showed consistent growth, with Q1 FY25 exports rising by
5.95% to $110 billion and imports increasing by 8.40% to $173 billion, leading to a
growing trade imbalance.
3. In Q1 FY25, Indian iron and steel exports experienced a massive decline (33%)
primarily due to weak domestic demand and excess capacity in China which
resulted in an oversupply of steel in the global markets.
4. In Q1 FY25, North America accounted for 21% of India’s exports, followed by the EU
at 18.61%. Imports were largely from Northeast Asia, West Asia (GCC), and ASEAN,
making up 51% of total imports.
5. During Q1 FY25, export growth to FTA partners was notably strong at 12%, while
import growth from these partners was 10.29%.
6. India’s Trade Intensity Index (TII) > 1 with 84 countries, representing 38.82% of
global GDP, and 67% of India’s exports, underscores its strong global trade ties.
7. India shows a comparative advantage (RCA > 1) in 43 commodities—represent 40%
of global import and constitute 68.2% of merchandise exports.
8. In 2023, India’s exports accounted for 1.71% of global imports. It captured only 9.61%
of the most widely demanded commodities, which represent 68% of the global
import basket.
9. In 2023, among 7 emerging economies, India’s share in world exports was better
than its peers in mineral fuels and products, natural and cultured pearls and
pharmaceutical products.
10. Several labour-intensive sectors such as natural and cultured pearls, lac, gums and
resins, manmade filaments and articles of leather have seen a decline in India’s
share in global exports in the recent years as compared to 2015.
11. India’s share in global services exports has more than doubled, reaching
approximately 4.6% in 2023 from 2% in 2005. It accounts for 10.20% of the world’s
services exports in IT services and 7.16% in other business services. ivTrade Watch April-June (Q1) FY25 vTrade WatchBApril-June (Q1) FY25
Contents
1. India’s Trade Analysis������������������������������������������������������������������������������������������������������������������������������������������������1
1.1. Merchandise and Services Analysis������������������������������������������������������������������������������������������������������1
1.2 Compositional Analysis���������������������������������������������������������������������������������������������������������������������������������2
1.3. Trade Direction��������������������������������������������������������������������������������������������������������������������������������������������������5
1.4. Regional Analysis��������������������������������������������������������������������������������������������������������������������������������������������6
2. Trade with FTA Partners���������������������������������������������������������������������������������������������������������������������������������������7
3. Scope to Leverage International Trade �����������������������������������������������������������������������������������������������������9
4. Does Export Comparative Advantage Play a Role��������������������������������������������������������������������������� 10
5. Mapping of India’s Exports with Global Demand�������������������������������������������������������������������������������11
6. Comparative Analysis with Emerging Economies��������������������������������������������������������������������������� 13
7. India’s Trade with Key Partners: Scope for Strategic Tie-ups����������������������������������������������������14
8. Evolving Trends in India’s Global Market Share: Fall and Rise��������������������������������������������������15
9. Is Geopolitical Turmoil Navigating Price Indices?����������������������������������������������������������������������������� 17
10. Potential Risks to India’s Trade due to CBAM�����������������������������������������������������������������������������������18
11. Recent Geopolitical Developments Affecting International Trade���������������������������������������19
12. Recent Development in India’s Trade Policy���������������������������������������������������������������������������������������21 1Trade WatchBApril-June (Q1) FY25
1. India’s Trade Analysis
Global growth is projected to be 3.3% in 2025
3
, slightly higher than previous forecasts
due to unexpected resilience in the US and some large emerging markets. With
growing uncertainty, the analysis of trade performance, composition, direction and
potential sectors has much significance for policy practitioners.
India’s trade performance showed improvement in the first half of 2024 compared
to 2023. In the first half (H1) of 2024, total trade amounted to $576 billion, reflecting a
y-o-y increase of 5.45%. Exports rose by 5.41% y-o-y to reach $231 billion, while imports
grew by 5.48%, reaching $345 billion (Figure 1).
Figure 1: Trade performance in the H1 of 2024
5.45%
5.41%
5.48%
5.36%
5.38%
5.40%
5.42%
5.44%
5.46%
5.48%
5.50%
0
100
200
300
400
500
600
Total Trade Export Import
USD Billion
Jan-Jun 2023 Jan-Jun 2024
Change % (RHS)
Source: Department of Commerce, MoC&I, GOI
1.1. MERCHANDISE AND SERVICES ANALYSIS
In June 2024, merchandise exports grew modestly by 2.48% y-o-y, reaching $35
billion, while imports saw a more significant rise of 5.94%, amounting to $57 billion
(Figure 2). This trend of rising imports is consistent over a longer horizon, as reflected
in Q1 FY25, where exports increased by 5.95% to $110 billion, and imports surged
by 8.40% to $173 billion compared to Q1 FY24. This indicates a robust demand for
imported goods, contributing to a growing trade imbalance. (Figure 3)
Figure 2: Merchandise Trade (Monthly) Figure 3: Merchandise Trade (Quarterly) 2.48%
5.94%
0%
2%
4%
6%
8%
0
10
20
30
40
50
60
June (EX) June (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
5.95%
8.40%
0%
2%
4%
6%
8%
10%
-
50
100
150
200
Q1 (EX) Q1 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
Source: Department of Commerce, MoC&I, GOI
3
https://www.imf.org/en/Publications/WEO/Issues/2024/07/16/world-economic-outlook-update-ju-
ly-2024#:~:text=Global%20growth%20is%20projected%20to,is%20complicating%20monetary%20policy%20
normalization. 2Trade WatcJBApril-June (Q1) FY25
India’s monthly services exports have reached nearly $29 billion, marking a 3.70%
increase in June 2024, while imports, at around $15 billion, declined by 3.80%
compared to 2023. Over the longer term, in Q1 FY25, services exports grew by
10.09% to $89 billion, with imports also rising by 9.09% to $48 billion.
Figure 4: Services Trade (Monthly) Figure 5: Services Trade (Quarterly) 3.70%
-3.80%
-6%
-4%
-2%
0%
2%
4%
6%
-
5
10
15
20
25
30
35
June (EX) June (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
10.09%
9.09%
0%
2%
4%
6%
8%
10%
12%
-
10
20
30
40
50
60
70
80
90
Q1 (EX) Q1 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
Source: Department of Commerce, MoC&I, GOI
1.2. COMPOSITIONAL ANALYSIS
Merchandise Exports
In Q1 FY25, the leading sectors were mineral fuels (19.96%)
4
, electrical machinery
and equipment (8.68%), and nuclear reactors (7.30%) (Figure 6). However, slower
export growth was noted due to significant declines in key sectors, with iron and
steel dropping by 33% and natural or cultured pearls by 3.56% (Figure 7). India’s
steel exports declined due to China’s dominance in global markets, driven by a
gradual increase in their production capacity, which lowered prices and reduced
export opportunities
5
.
Figure 6: Composition of Exports19.96%
8.68%
7.30%
6.63%
5.29%
4.93%
4.50%
2.61%
2.14%
2.13%
0%5%10%15%20%25%
Mineral fuels
Electrical Machinery
Nuclear reactors
Natural or cultured pearls
Pharmaceutical
Vehicles other than railway
Organic chemicals
Cereals
Articles of iron or steel
Iron and steel
Source: Department of Commerce, MoC&I, GOI
4
India remains a substantial exporter of refined petroleum products and other mineral fuels. The primary
destinations for these exports include the Netherlands, the United Arab Emirates, and the United States.
As the global energy landscape evolves, India’s trade dynamics in mineral fuels will likely continue to adapt
to both domestic needs and international market conditions. - https://trendeconomy.com/data/h2/India/2
5
https://www.crisil.com/en/home/our-analysis/views-and-commentaries/2024/06/steel-smarting.html -
India’s steel exports declined due to China’s dominance in global markets, lowering prices and reducing
export opportunities. On the other hand, Indian steel mills have also adopted a mixed export strategy,
prioritizing the domestic market when prices were favorable, which have also contributed to the drop. 3Trade WatcJBApril-June (Q1) FY25
Figure 7: y-o-y Q’1 Exports11.92%
16.04%
14.86%
-3.56%
11.12%
7.71%
6.70%
-6.66%
-0.65%
-33%
-40% -30% -20% -10% 0% 10% 20%
Mineral fuels
Electrical Machinery
Nuclear reactors
Natural or cultured pearls
Pharmaceutical
Vehicles other than railway
Organic chemicals
Cereals
Articles of iron or steel
Iron and steel
Source: Department of Commerce, MoC&I, GOI
The predominant import sectors include mineral fuels (35%)
6
, electric machinery
(11%), natural and cultured pearls (10%) and nuclear reactors (8%). The increase
in imports was driven by a significant y-o-y rise of 30.38% in aircraft, spacecraft,
and parts, followed by a 19.60% increase in animal or vegetable fats and oils, and
a 13.96% growth in mineral fuels. On the other hand the imports growth has
remained zero for sectors such as Iron & Steel, Organic chemical and Natural or
cultured pearls.
Figure 8: Composition of Imports35.25%
11.11%
9.62%
8.49%
3.87%
3.12%
2.46%
2.25%
2.10%
1.89%
0% 10% 20% 30% 40%
Mineral fuels
Electrical machinery
Natural or cultured pearls
Nuclear reactors
Organic chemicals
Plastic and articles
Animal or vegetable fats and oils
Iron and steel
Aircraft & spacecraft
Optical, photographic
Source: Department of Commerce, MoC&I, GOI
7
6
In 2024, India’s trade in mineral fuels continues to play a crucial role in its economy. The country imports
significant quantities of mineral fuels, primarily crude oil, coal, and petroleum gases. - https://trendecono-
my.com/data/h2/India/27
7
For the purpose of this analysis, the top 10 commodities, based on their highest share exports/imports
during this quarter, were examined 4Trade WatcJBApril-June (Q1) FY25
Figure 9: y-o-y Q’1 Imports13.96%
8.26%
0%
8.67%
-0.01
1.14%
19.60%
0%
30.38%
9.14%
-10% 0% 10% 20% 30% 40%
Mineral fuels
Electrical machinery
Natural or cultured pearls
Nuclear reactors
Organic chemicals
Plastic and articles
Animal or vegetable fats and?
Iron and steel
Aircraft & spacecraft
Optical, photographic
Source: Department of Commerce, MoC&I, GOI
Service Exports
As of 2023, India’s share in global services exports has increased significantly,
reaching approximately from 2% in 2005
8
. India accounts for 10.20% of the world’s
service exports in IT services and 7.16% in other business services.
Travel, transport, and financial services constitute 19.23%, 17.08%, and 8.61% of
the global export basket, respectively. However, India’s share in these categories
remains relatively low at 2.12%, 2.17%, and 1.25%, respectively (Figure 10). These
figures suggest there is significant potential for Indian service exporters to
expand their presence in major export markets such as the USA, Germany, the
UK, Ireland, Netherlands, etc. Services exports has provided a pathway for the
post-Covid recovery of India (Figure 11). If intermediate value addition in services
is captured aptly, it can help further strengthen service exports.
9
Figure 10: Export share of services1.44%
1.57%
2.83%
8.61%
13.78%
17.08%
19.23%
24.62%
0% 5% 10%15%20%25%30%35%40%
Construction
Personal, cultural & recreational
services
Insurance and pension services
Financial services
IT Services
Transport
Travel
Other business services
Share in World's Service Export 2023 India's share in World's Service Export 2023
Share in India's Export 2023
Source: WTO-UNCTAD estimates
8
https://www.goldmansachs.com/insights/articles/how-india-services-economy-became-a-world-leader
9
https://unctad.org/system/files/official-document/ldc2021overview_en.pdf 5Trade WatcJBApril-June (Q1) FY25
Figure 11: Growth in Export of Commercial Services130.0
216.4
104.5
157.5
100
120
140
160
180
200
220
201520162017201820192020202120222023
Index value (2015=100)
India Index World Index
Source: WTO-UNCTAD estimates
1.3. TRADE DIRECTION
Merchandise Exports
India’s exports to its top markets (USA, UAE, Netherlands, UK, China, Singapore)
remained stable, accounting for about 43% of total exports. In Q1 FY25, India saw
positive export growth in 9 out of 10 key economies. However, declines were
recorded with China (-3.30%), compared to Q1 FY24. (Figure 12)
Figure 12: India’s goods exports to major destinations-20%
0%
20%
40%
60%
80%
100%
0
5
10
15
20
25
USD Billion
Q1 FY24 Q1 FY25 y-o-y growth % (RHS) % share in India's exports Q1'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
10
USA, UAE & Netherlands are the top importers of Indian goods, accounting for
almost 33% of the total merchandise exports (Figure 12). India’s import exposure
to its top markets (China, Russia, UAE, USA, Iraq, Saudi Arabia, and Indonesia)
remained stable, making up nearly 53% of total imports. In Q1 FY25, India recorded
significant y-o-y import growth with Russia (19.69%), UAE (35.67%), and Iraq
(27.64%), compared to Q1 FY24. However, imports saw a decline with Saudi Arabia
(-1.70%), Singapore (-1.93%), and Switzerland (-10.01%). (Figure 13)
10
For the purpose of this analysis, the top 10 destinations were examined based on their export shares in the
total exports for this quarter. 6Trade Watch April-June (Q1) FY25
Figure 13: India’s goods imports from major destinations-20%
-10%
0%
10%
20%
30%
40%
0
5
10
15
20
25
30
USD Billion
Q1 FY24 Q1 FY25 y-o-y growth % (RHS) % share in India's imports Q1'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
11
Service Export
India’s top export and import destinations for 2021
12
were the USA, UK and
Singapore. Countries like UAE, Switzerland and Netherlands maintain strong
positions in service exports, reflecting their growing influence on India’s services
trade.
Figure 14: India’s service trade to major destinations, 20210%
5%
10%
15%
20%
25%
0
20
40
60
80
100
USD Billion
Total Services ExportTotal Services ImportShare in total service exports 2021 (RHS)Share in total service imports 2021 (RHS)
Source: WTO-OECD Balanced Trade in Services
1.4. INDIA’S TRADE: REGIONAL ANALYSIS
India’s exports are primarily directed towards North America, the EU, West Asia
(GCC), and ASEAN, while imports mainly come from Northeast Asia, West Asia
(GCC), and ASEAN.
In Q1 FY25, North America accounted for about 21% of India’s exports, followed
by the EU with 18.61% which has shown a growth rate of 11.26% and 12.33%,
respectively. However, export slowdowns were observed in Northeast Asia (share
in India’s merchandise export 7.6%) and West Africa (share in India’s merchandise
export 2.6%). (Figure 15)
11
For the purpose of this analysis, the top 10 destinations were examined based on their import shares in the
total imports for this quarter.
12
For bilateral service trade latest data available is for the year 2021. 7Trade Watch April-June (Q1) FY25
Figure 15: Region-Wise y-o-y (%) Q’1 Goods Exports growth11.26%
12.33%
12.83%
10.73%
-6.12%
7.62%
5.55%
-3.73%
-8.70%
22.74%
-10% -5% 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
Source: Department of Commerce, MoC&I, GOI
The Asian region, particularly Northeast Asia, West Asia (GCC), and ASEAN, is a key
source of India’s imports in Q1 FY25, accounting for nearly 51% of total imports. In
Q1 FY25, imports from East Asia (Oceania), the European Free Trade Association
(EFTA), and the EU contracted, while imports remained strong from ASEAN,
suggesting that FTAs have facilitated more liberalized trade flows.
Figure 16: Region-Wise y-o-y (%) Q’1 Goods Import growth7.46%
18.57%
10.87%
20.56%
-7.97%
4.70%
15.90%
7.27%
-9.43%
-19.76%
-20% -10% 0% 10% 20% 30%NE Asia
West Asia- GCC
ASEAN
Other CIS Countries
EU Countries
North America
Other West Asia
Latin America
EFTA
East Asia (Oceania)
Source: Department of Commerce, MoC&I, GOI
2. Merchandise Trade with FTA Partners
In Q1 FY25, exports to FTA partners grew by 12%, while imports grew by 10.29%. Export
growth was strong with ASEAN, UAE, Singapore, Malaysia, Sri Lanka, and Mauritius,
while imports surged from ASEAN, UAE, and South Korea. Despite exports to Mauritius
and Singapore, imports from Mauritius (-34.21%) and Singapore (-1.93%) declined. 8Trade Watch April-June (Q1) FY25
Figure 17: Exports- FTA Countries-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
0
2
4
6
8
10
12
USD Billion
t?uMt ux3?)?3 "DC #D t?ux )0, t?uM S ??
Source: Department of Commerce, MoC&I, GOI
Figure 18: Imports- FTA Countries-40%
-20%
0%
20%
40%
0
5
10
15
20
25
USD Billion
t?uMt ux3?)?3 "DC #D t?ux )0, t?uM S ??
Source: Department of Commerce, MoC&I, GOI
India’s efforts to enhance bilateral FTAs now include a component of the services
sector. Some of the key measures aimed at boosting service exports are as follows:
Few Measures taken by India to Strengthen Bilateral Service Exports
• India-UAE CEPA: UAE is the third largest trading partner and second largest export
market for India. Signed in 2022, this agreement provides Indian service providers the
opportunity to export 100 out of 160 service sub sectors and UAE has offered to export 111
out of 160 subsectors to India.
13
These broadly include services across financial, insurance,
tourism business and construction.
• India-EFTA Trade and Economic Partnership Agreement: Signed on March 2024 with
comprising Switzerland, Norway, Iceland, and Liechtenstein, this agreement focuses on
enhancing the trade in financial, telecommunications, insurance and banking services.
14
• India Australia Economic Cooperation and Trade Agreement: Signed in 2022, this
agreement provides the opportunity to export 135 service sub sectors and Australia has
offered to export 103 subsectors to India. Broadly, these sectors range from business services,
communication services, construction and related engineering services and so on.
15
13
https://pib.gov.in/PressReleasePage.aspx?PRID=1921222#:~:text=CEPA%20is%20a%20full%20and,Mo -
hamed%20bin%20Zayed%20Al%20Nahyan.
14
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2013169
15
https://www.pib.gov.in/PressReleasePage.aspx?PRID=1887259 9Trade WatchBApril-June (Q1) FY25
3. Scope to Leverage International Trade
India’s Trade Intensity Index (TII)
16
score is greater than 1 with 84 countries, which
captures 38.82% of the world GDP, and 67% of India’s exports. There is still scope to
form trade partnerships with countries accounting for 60% of the world GDP.
India holds a Revealed Comparative Advantage (RCA)
17
> 1 in 43 commodities, accounting
for 68.2% of its export basket and nearly 40% of global demand. With a strong comparative
advantage (RCA ≥ 4) in four labour-intensive sectors - cotton, carpets, lac & gums, and
lead - there is a need to align policies to increase exports for these products.
Table 1: Massive scope to leverage International Trade
TII TII>1 TII<1 RCARCA>1 RCA<1
No. of
Countries (222)
84
(Share in
world GDP
~38.82%)
138
No. of
Commodities = 97
(HS 2)
43
(39.73%
share in world
imports)
54
Share in
India’s Export
Basket
67% 33%
Share in India’s
Export
68.2% 31.8%
Source: Department of Commerce, MoC&I, GOI
India shows a relatively strong RCA in IT and other business services (RCA>1). Notably,
other business services and IT services also held substantive shares in World’s service
export in 2023. The expansion in other business services has mainly been fueled by
sectors like business and management consulting, public relations, engineering
services, advertising, trade fair services, and various technical services, including
scientific and space-related services.
18
Figure 19: Services: Revealed Comparative Advantage (RCA) for 20232.40
1.68
0.83 0.80
0.51 0.50
0.34 0.29
13.78%
24.62%
1.44%
1.57%
17.08% 19.23%
2.83%
8.61%
0%
5%
10%
15%
20%
25%
30%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
IT Other
business
ConstructionPersonal,
cultural, and
recreational
Transport Travel Insurance and
pension
Financial
RCA Share
RCA 2023Share in World's Service Export 2023 (RHS)
Source: UNCTAD
16
The trade intensity index (TII) is used to determine whether the value of trade between two countries is
greater or smaller than would be expected on the basis of their importance in world trade. It is defined as
the share of one country’s exports going to a partner divided by the share of world exports going to the
partner.
17
A country is said to have a revealed comparative advantage (RCA) in a given product i when its ratio of ex-
ports of product i to its total exports of all products exceeds the same ratio for the world as a whole. If RCA
takes a value greater than unity, the country has a revealed comparative advantage in that product.
18
https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf 10Trade WatchBApril-June (Q1) FY25
4. Does Comparative Advantage play a critical role?
India’s export performance reveals a divergence across commodities: low RCA
commodities performed well, while weak and medium RCA commodities stagnated,
necessitating targeted policy support.
At aggregate level (HS- 2 digit), 54 commodities with lower comparative advantage
(0 < RCA ≤ 1) have performed better in this quarter. Exports in these commodities
increased by 11.77% YoY in June 2024 and 12.38% during the April-June 2024 period,
contributing 32% to total exports. (Figure 20)
In contrast, there are 25 commodities with weak comparative advantage (1 < RCA ≤
2), but where 45% of commodities are present and have faced a significant 4.11% YoY
decline in June 2024. The contraction suggests sectoral vulnerabilities, potentially due
to global trade tensions or domestic challenges.
Medium comparative advantage (2 < RCA ≤ 4) in 14 commodities exhibited tepid
growth, with a 1.36% increase in June 2024 and 4.58% over the April-June period,
representing 21% of total exports.
Strong comparative advantage (4 < RCA) in 4 commodities (Cotton, Carpets, Lac &
gums, Resins and Lead and Articles thereof) remained resilient, with exports growing
by 11.96% during the April-June period, yet they constitute only 2% of the total
exports. This growth underscores the robust performance of India’s labour-intensive
manufacturing. However, the limited number of these high-RCA commodities
suggests a strategic imperative to diversify and expand India’s export portfolio.
Figure 20: Growth performance of exports of potential products32%
45%
21%
2%
0%
10%
20%
30%
40%
50%
-8
-4
0
4
8
12
16
0<RCA?1 1<RCA?2 2<RCA?4 4<RCA
Share (%)
y-o-y Growth (%)
Jun'24 Apr-June'24 Share (RHS)
Source: Department of Commerce, MoC&I, GOI & NITI’s own calculation
At dis-aggregate level analysis (HS-6 digits), 4422 commodities constituting 68% of
the world’s imports, but India’s export share is only 0.26% of the world’s demand as
illustrated in Table 2. On the other hand, although these 434 commodities make up
just 2.9% of global imports, India captures a significant 18.53% share of exports in these
products. India has to strengthen its position in broader global markets (where its
presence is currently low) while maintaining its competitive edge in niche segments.
(Table 2) 11Trade WatchBApril-June (Q1) FY25
Table 2: India’s Exports Presence in Global Demand
Average Share
% (2019-2023)
Particulars
2023 (US$
billion)
Share % in 20232023
Category
India’s export
share in World’s
import
Number of
6HS items
India’s
Exports
World’s
Imports
India’s
Export
Basket
World’s
Import
Basket
India’s Export
Share %
in World’s
Import
Category 1Less than 1% 4,422 41.5216,005.479.61 67.99 0.26
Category 2
Between 1% -
5%
1,389 135.915,299.2831.4622.51 2.56
Category 3
Between 5% -
10%
384 127.871,553.3329.6 6.6 8.23
Category 4More than 10% 434 126.68683.7629.332.90 18.53
Total of the
above
6,629 431.9823,541.84100 100 1.71
Source: ITC Trade Map & NITI’s own calculation
5. Mapping of India’s Exports with Global Demand
This section maps India’s supply of major export products to that of the top three
exporting countries in each category for their exports utilizing yearly data of 2023. This
analysis highlights trade patterns in India’s exports that can inform strategy. (Table 3).
The USA is a critical market across all product categories followed by UAE and
Netherlands. China is the main competitor in several key product categories
highlighting the need for India to enhance competitiveness in these products. India
has a solid foothold in developed markets like the USA, UK, and Germany, across top
product categories but there are opportunities to explore emerging markets.
Table 3: Mapping of India’s Supply with Leading Exports and their Prime Destinations, 2023
Supply SideDemand Side
India’s top
export
destinations
Country’s
share in
India’s exports
of respective
product
category
Share of
product
category in
India’s total
exports to
respective
country
Leading global
exporter in
respective
product world
market
Top destinations of
leading global exporter
in respective Product
Minerals fuels & products
Netherlands16.8 64.9USA (10.2)
Mexico (13.9),
Netherlands(9.5), Canada
(8.9)
UAE 8.422.6Russia (8.2)
China (21.5), Netherlands
(15.8), Germany (5.8)
USA 7.38.6Saudi Arabia (8)
China (17.3), Japan (12.2),
South Korea (11) 12Trade WatcJBApril-June (Q1) FY25
Supply SideDemand Side
India’s top
export
destinations
Country’s
share in
India’s exports
of respective
product
category
Share of
product
category in
India’s total
exports to
respective
country
Leading global
exporter in
respective
product world
market
Top destinations of
leading global exporter
in respective Product
Natural or Cultured pearls
USA 30.4 13.4
Switzerland
(14.7)
China (23.1), India (11.5),
Turkey (11)
UAE 22.6 23Hong Kong (9.4)
China (52.3), USA (7.1), UAE
(6.4)
Hong
Kong
21.8 83.4UK (9.3)
Switzerland (37.7), China
(22), Hong Kong (9.7)
Electrical machinery & Equipment
USA 30.6 13.05 China (27.6)
Hong Kong (16.9), USA
(13.9), South Korea (5.1)
UAE 11.2 11
Hong Kong
(21.7)
China (63.6), USA (4.4),
India (4)
UK 5.312.77 Taipei (9.9)
China (27.6), Hong Kong
(21.7), Singapore (9.9)
Nuclear reactors
USA 20.4 7.9China (20)
USA (17.4), Hong Kong
(7.1), Russia (4.9)
Germany 5.215.8Germany (10.7)
USA (12.5), China (7.9),
France (7.3)
Singapore4.911.9USA (9.1)
Canada (22.6), Mexico
(19.6) , China (5.9)
Pharmaceuticals products
USA 35.4 10Germany (14.3)
USA (22.9), Netherlands
(9), Switzerland (6.8)
UK 34.7
Switzerland
(11.9)
USA (31), Germany (10.6),
Slovenia (6.4)
South
Africa
2.97.8USA (10.8)
China (11), Netherlands
(9.5), Belgium (8.9)
Source: ITC Trade Map
Mineral Fuels & Products: These products constitute a significant share of exports
from India to the Netherlands. While the Netherlands is a key market for India, it’s also
a major destination for leading exporters like Russia and the USA.
Natural or Cultured Pearls: These products have a significant exports share in total
exports of India to these key markets such as Hong Kong, USA and UAE. However,
Switzerland and Hong Kong also have a solid presence in the same markets, particularly
China. India can focus on expanding its share in the growing Chinese market. 13Trade WatcJBApril-June (Q1) FY25
Electrical machinery & Equipment: India faces stiff competition in this sector, especially
from China, which has a much larger global share and targets similar markets (e.g.,
the USA and UAE).
Nuclear reactors: India is relatively competitive in this high-tech sector, with a
significant export presence in the USA and Germany. However, China remains the
largest global exporter.
Pharmaceutical products: India is a major player in the global pharmaceutical market,
especially in the USA. However, countries like Germany and Switzerland are also key
players, with significant market shares in the USA and other developed nations. India
should leverage its cost-effective pharmaceutical production to capture more global
demand.
Overall, by focusing on technological advancement, strategic market expansion, and
value addition, India can further enhance its global market share in these critical
industries.
6. Comparative Analysis with Emerging Economies
Table 4 compares India’s commodity share with that of its competitors in the global
market. India performs well in pharmaceutical products, cereals, and natural pearls.
Sectors like electrical machinery, nuclear reactors, and vehicles show significant
room for improvement. China is India’s leading competitor across the majority of
India’s export commodities. Brazil, Indonesia, and South Africa generally trail India
in most categories, while Malaysia and Thailand outperform India in select sectors
like electrical machinery. Understanding peer strategies could help India improve its
competitiveness in these areas.
Table 4: Comparative assessment of India’s exports with peers in Heavy-weight sectors (HS 2)
Country’s share in world’s export 2023 (%)
India’s major
export
commodities
Commodity’s
share in
world
export’23 (%)
IndiaBrazil
Indon-
esia
Malaysia
South
Africa
ThailandChina
Cereals 0.7 6.9 9.2 0 0 0.9 3.2 0.6
Natural &
Cultured
pearls
3.7 3.9 0.5 0.9 0.4 2.3 1.7 3.6
Organic
Chemicals
2.1 3.9 0.4 0.6 1 0.2 0.8 15.7
Minerals fuels
& products
13.6 2.8 1.7 1.9 1.6 0.4 0.3 1.9
Pharmaceuticals
products
3.6 2.6 0.1 0.1 0.1 0.1 0.1 1.4
Articles of
Iron & Steel
1.6 2.6 0.5 0.4 0.7 0.3 1.4 25.8
Iron & Steel2 2.5 3.1 5.6 1.2 1.4 0.3 14.6 14Trade WatchBApril-June (Q1) FY25
Country’s share in world’s export 2023 (%)
India’s major
export
commodities
Commodity’s
share in
world
export’23 (%)
IndiaBrazil
Indon-
esia
Malaysia
South
Africa
ThailandChina
Nuclear
reactors
11 1.1 0.5 0.3 0.9 0.2 1.6 20
Vehicles other
than Railways
8 1.1 0.7 0.6 0.1 0.7 1.8 10.3
Electrical
Machinery &
Equipment
14.9 0.9 0.1 0.4 3.4 0.1 1.4 26
Source: ITC Trade Map
7. India’s Trade with Key Partners: Scope for Strategic
Tie-ups
Table 5 illustrates the bilateral competitiveness and intensity of India’s major exports
across key sectors, emphasizing the extent to which Indian exports meet demand in
top destination markets.
India has established strong trade relationships with the USA and UAE in sectors like
minerals fuels, pharmaceutical products, and natural pearls. These sectors present
further opportunities for India to deepen trade ties and expand its market share. India
also has significant untapped potential in sectors like electrical machinery, vehicles,
and organic chemicals, especially in markets like the USA, China, and the UK.
Table 5: India’s Trade with Key Partners: Scope for Strategic Tie-ups
Top
Commodities
in India’s
Export Share
Share in
India’s
total
Exports
(%)
Top Partners
importing
commodity
from India
India’s share
in total
imports
of top
destinations
(%)
Partner’s
share in
India’s
exports (%)
Bila-
teral
RCA
Bila-
teral
TII
Minerals
fuels &
products
20.71
Netherlands 0.8 16.8 3.0 5.7
UAE 15.438.4 5.1 34.6
USA 1.9 7.3 1.0 1.3
Natural or
Cultured
pearls
7.75
USA 13.8 30.4 4.7 6.2
UAE 8.1
3
22.6 1.1 7.5
Hong Kong 621.8 5.0 3.6
Electrical
machinery &
Equipment
7.49 USA 2.6 30.6 0.9 1.2
UAE 8.8
3
11.2 0.8 5.1
UK3.1 5.3 1.4 1.3
Nuclear
reactors
6.79
USA 1.5 20.4 0.5 0.7
Germany 0.9 5.2 1.3 0.5
Singapore 14.9 0.8 1.2 15Trade WatchBApril-June (Q1) FY25
Top
Commodities
in India’s
Export Share
Share in
India’s
total
Exports
(%)
Top Partners
importing
commodity
from India
India’s share
in total
imports
of top
destinations
(%)
Partner’s
share in
India’s
exports (%)
Bila-
teral
RCA
Bila-
teral
TII
Pharmac-
euticals
products
4.94
USA 6.2 35.4 1.8 2.3
UK3.4 3.0 1.4 1.3
South Africa 24.8 2.9 3.5 14.1
Vehicles
other than
Railways
4.83
USA 0.7 12.4 0.3 0.4
Mexico 3.2 8.1 3.1 1.5
Saudi Arabia 5.1 7.9 1.0 3.9
Organic
Chemicals
4.52
USA 5.8 13.1 1.6 2.1
China 36.3 4.0 1.4
Netherlands 3.3 5.2 1.9 3.5
Iron & Steel
2.74
Italy 7.3 14.9 5.3 3.8
Nepal 91.5 7.2 1.3 49.9
Belgium 4.7 6.0 3.4 2.7
Cereals
2.62
Saudi Arabia 16.9
19
11.4 5.8 21.7
Iran 13.1 6.5 7.0 19.5
Iraq 13.7
20
6.5 4.6 18.4
Articles of
Iron or Steel
2.26
USA 5.4 28.3 2.2 2.8
UAE 10.1 5.9 0.9 6.2
Saudi Arabia 7.5 4.9 1.5 5.5
Source: ITC Trade Map
India should look to strengthen partnerships with countries where bilateral TII and
RCA are already high, such as South Africa (pharmaceuticals), Saudi Arabia and Iran
(cereals) and the UAE (multiple sectors). There’s also scope to enhance exports to
major economies like the USA and European countries by focusing on niche markets
and innovative products.
8. Evolving Trends in India’s Global Market Share: Fall and
Rise
In recent years, India’s share in global trade has fallen for labour-intensive sectors
despite significant endowment.
The trade share for natural and cultured pearls has decreased due to the scarcity of
natural pearls and the rising demand for South Sea pearls, especially in China. India’s
share in the global boneless frozen beef trade has fallen due to stagnant exports,
currency crises in key importers like Egypt, and COVID-19 disruptions.
19
Latest available data is for 2022
20
Latest available data is for 2014 16Trade WatcJBApril-June (Q1) FY25
Similarly, challenges in the polyester value chain and anti-dumping duties have
lowered the share for Indian Man-made Fibre (MMF) textiles. India’s share in major
leather export markets has declined due to market instability, stiff competition, and
environmental regulations. Decreased global demand, lower cotton production, and
high prices have reduced the share for Indian cotton exports. Quality control orders and
global economic slowdowns have led to a drop in India’s textiles and apparel exports,
with certification mandates for raw materials and reduced purchasing capacity from
high inflation further impacting this decline.
Figure 21: Product categories- falling share in world trade-50%
-40%
-30%
-20%
-10%
0%
0%
4%
8%
12%
16%
20%
Meat and edible meat
Lac; gums, resins
Natural or cultured
pearls
Articles of apparel
and clothing
Man-made filaments
Articles of leather
Articles of apparel
and clothing
accessories
Raw hides and skins
Salt
Man-made staple
fibres
Other vegetable
textile fibres
Cotton
Carpets and other
textile floor coverings
Zinc and articles
thereof
Pharmaceutical
products
India's share in world exports' 15India's share in world exports' 23 Change in India's share (2015 to 2023)- RHS
Source: ITC Trade Map
The product categories exhibiting an RCA greater than 1 and significant growth in
international trade are straw, ceramic products, electrical machinery, products of
animal origin and explosives. The export growth of ceramic has been particularly in
tiles due to a surge in shipments of sanitary ware products.
21
Figure 22: Product categories- rising share in world trade
0%
100%
200%
300%
400%
500%
600%
0%
2%
4%
6%
8%
Manufactures of
straw
Ceramic products
Products of
animal origin
Explosives
Sugars
Aluminium and
articles thereof
Mineral fuels
Silk
Prepared feathers
& articles
Iron and steel
Edible vegetables
Articles of stone,
cement etc.
Coffee, tea, maté
and spices
Fish and
crustaceans
India's share in world exports' 15India's share in world exports' 23Change in India's share (2015 to 2023)- RHS
Source: ITC Trade Map
21
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1819614#:~:text=The%20Union%20Minister%20
for%20Commerce,the%20achievement%20in%20a%20Tweet.&text=The%20export%20growth%20of%20
Ceramic,Tiles%20and%20Sanitary%20wares%20products. 17Trade Watch April-June (Q1) FY25 9. Is geopolitical turmoil navigating price indices?
Following the geopolitical turmoil triggered by the war in Ukraine, the global
commodity markets have since experienced a broad based and sustained price
decline throughout 2023 and into 2024. This trend aligns with broader economic
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:??H2L:/?????:P//?o?o????:.
The aggregate commodity price index declined by 2.3% from April 2023 to June 2024,
driven primarily by reductions in cereal, coal, and metals prices. The deceleration
in China’s economic rebound, especially in the construction sector, contributed
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in the Metal Index over the same period. The Cereal Index also witnessed a notable
decline, decreasing by 26.4% from April 2023 to June 2024. The increased production
of key grains, particularly maize and soybeans, coupled with continued exports
from the Black Sea region, played a crucial role in this downward trajectory. The coal
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2????H??:???H????2?o?????/?HH?2:?:?PH2??:???P:H??H???2??2?o/?????:
in response to evolving market conditions.
By mid-2024, the All-Commodity Index showed modest recovery observed in crude
oil prices, which rose to $200 per barrel in June 2024. However, the overall trend for
commodities in 2024 suggests a continuing moderation, particularly for industrial
metals and energy commodities. Tight global monetary conditions are expected to
persist, further weighing on construction and investment spending, particularly in
China, which continues to grapple with structural challenges in its real estate sector.
(Figure 23)
Figure 23: Price indices across key commodities
100
120
140
160
180
200
220
240
260
All commodity index APSP crude oil($/bbl) Cereal index
Coal indexMetal indexPrecious Metals Price Index
Source: IMF 18Trade WatchBApril-June (Q1) FY25
10. Potential Risks to India’s Trade due to CBAM
The European Union (EU) is India’s second-largest trading partner. In FY2023-24, the
EU accounted for 17.4% ($76 billion) of India’s total exports. India’s export growth to
the EU (27 countries), the European Free Trade Association (EFTA) (4 countries), and
other European countries, including the UK (7 countries), was 1.45%, 0.86%, and -2.68%,
respectively. India maintains a substantial positive trade balance with the EU and
other EU countries (Figure 24).
Several studies assessing the EU’s Carbon Border Adjustment Mechanism (CBAM)
identify African and Asian countries as the most vulnerable to its effects. CBAM, aimed
at preventing carbon leakage, and will apply to high-risk imports such as cement,
iron and steel, aluminium, fertilizers, electricity, and hydrogen starting January 2026.
It requires the purchase of CBAM certificates, reflecting the carbon emissions linked
to these goods.
For India, the iron and steel industry, representing 23.5% of its EU exports, faces the
highest exposure under CBAM (Figure 25). Indian firms may incur tariffs of 20-35%,
leading to higher costs, reduced competitiveness, and lower demand in the EU
market. Additionally, compliance costs will rise due to the need for detailed emissions
reporting.
Figure 24: India’s trade with Europe region-20
0
20
40
60
80
100
120
Import Export BOT Import Export BOT
2022-232023-24
US $ Billion
EU EFTA Other EU
Source: MoCI
India’s CBAM Exposure Index, currently at 0.03
22
, underscores the importance of
reducing the carbon footprint of its industrial goods to remain competitive in the
EU. With geopolitical shifts and a growing emphasis on sustainability, India must
implement policy measures to ensure coherence between trade and environmental
goals, aligning its long-term trade objectives with global trends.
22
https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index#4 19Trade WatchBApril-June (Q1) FY25
Figure 25: CBAM products export to EU (2022)23.55% 9.08% 1.12% 0.61%
76.45%
90.92%
98.88% 99.39%
0%
20%
40%
60%
80%
100%
Iron & SteelAluminium FertilizersCement
Exports of Products to EU (% of
total exports)
Exports to EU Exports to Others
Source: World Bank
11. Recent Geopolitical Developments Affecting International
Trade
In 2024, the international trade landscape was heavily influenced by several significant
geopolitical developments. These events not only disrupted global supply chains but
also posed both challenges and opportunities for India’s trade relations.
(i) U.S.-China Tensions and Technology Trade Wars
23
The U.S. has implemented stricter export controls and higher tariffs on Chinese goods
to limit China’s growth and expenditure towards technological progress. This has led
to a fragmentation of global supply chains, prompting multinational corporations to
seek alternatives to Chinese manufacturing. The trade war has caused increased costs
and production delays, impacting global markets.
For India, this situation presents both challenges and opportunities. On the one
hand, India has to navigate the disruptions in the global supply chain, and be wary
of China dumping its products in Indian markets. On the other hand, India is seen as
an attractive destination for companies looking to shift their manufacturing bases
out of China. This shift offers India a chance to enhance its domestic manufacturing
capabilities, particularly in high-tech industries. However, India has seen limited
success so far in capturing the China Plus One strategy so far. Vietnam, Thailand,
Cambodia, and Malaysia have become bigger beneficiaries of the strategy. Factors
such as cheaper labour, simplified tax laws, lower tariffs and proactiveness in signing
Free Trade Agreements (FTAs) have played a critical role in helping these countries
expand their export shares.
24
(ii) West Asia Instability and Maritime Security
25
The Middle East continues to experience heightened geopolitical tensions, with conflicts
in Syria, Yemen, and the Israel-Hamas situation posing significant risks to global
23
https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index#4
24
https://sansad.in/getFile/rsnew/Committee_site/Committee_File/ReportFile/13/174/179_2023_5_12.pdf?-
source=rajyasabha
25
https://sansad.in/getFile/rsnew/Committee_site/Committee_File/ReportFile/13/174/179_2023_5_12.pdf?-
source=rajyasabha 20Trade WatcJBApril-June (Q1) FY25
stability. These tensions have raised concerns about the security of key maritime routes,
particularly the Strait of Hormuz, through which a substantial portion of the world’s oil
flows. Any disruption in this region could destabilize global energy supplies, leading to
price spikes in crude oil and supply shortages. Additionally, trade routes like the Suez
Canal face the risk of delays and increased costs due to the instability in the region.
For India, the risks are multi-dimensional. A $10 per barrel increase in oil prices is
projected to worsen India’s Current Account Deficit (CAD) by 0.5% of GDP, exacerbating
inflationary pressures and further straining trade balances
26
. India’s dependence on
the Middle East for both energy and agricultural exports makes it vulnerable, with key
markets such as Iran for basmati rice and tea seeing sharp declines.
(iii) Economic Growth in Asia and Its Impact on Trade
27
In 2024, Asia’s economic growth had a significant impact on global trade, shaping
regional dynamics. The region is projected to grow by 4.0%, with China leading
the way. China’s economy expanded by 5.2% in 2023, targeting 5% growth in 2024,
driven by fiscal policies such as monetary easing and infrastructure investments that
bolstered its manufacturing sector by 7.7% and merchandise trade by 8.7%. Other
Asian economies experienced mixed outcomes—Indonesia sustained 5.0% growth,
while Japan and South Korea saw slower expansions due to weaker exports and
tighter monetary conditions.
For India, this regional growth backdrop offers both opportunities and challenges.
After achieving 6.7% growth in FY24, India is expected to maintain robust momentum
with 6.5-7% growth in FY25, fuelled by public investment and stronger integration into
global supply chains.
28
26
https://www.livemint.com/market/commodities/every-10-rise-in-brent-widens-indias-cad-by-0-5-analysts-
measure-impact-of-high-crude-prices-on-indian-economy-11694868044584.html
27
https://www.imf.org/-/media/Files/Publications/REO/MCDCCA/2024/Update/January/English/text.ashx
28
https://pib.gov.in/PressReleasePage.aspx?PRID=203497 21Trade WatchBApril-June (Q1) FY25
12. Recent Developments in India’s Trade Policy
◊ Interest Equalisation Scheme: The scheme extended until September 30, 2024,
only for MSME manufacturing exporters, aims to provide identified exporters a
cheaper source of rupee credit for pre-shipment and post-shipment activities to
improve product competitiveness in international markets.
29
◊ The Remission of Duties and Taxes on Exported Products (RoDTEP): The
scheme extended until September 30, 2024, aims to neutralize taxes and duties
on exported goods. Recent extensions benefits include Special Economic Zones
(SEZs), Advance Authorisation Holders, and Export Oriented Units (EOUs) aimed at
improving supply chain flexibility.
30
◊ Export Promotion Capital Goods (EPCG): Effective July 25, 2024, the scheme allows
duty-free import of capital goods aimed at building domestic capacity. It includes
an extended period for submitting Installation Certificates for imported capital
goods, a simplified composition fee structure for extending the Export Obligation
(EO) period.
31
◊ Trade Facilitation: India scored 93.55% in the 2023 UNESCAP Global Survey on
Digital and Sustainable Trade Facilitation, up from 90.32% in 2021, making it the
top performer in South Asia with a score surpassing that of several developed
countries, including Canada, France, the UK, and Germany.
32
◊ Trade Connect e-Platform: A single-window platform to boost international trade
for Indian MSME exporters, offering real-time trade info and resources to connect
with government and markets. The platform also facilitates the utilization of Free
Trade Agreements, promoting higher export volumes and global competitiveness.
33
◊ 11
th
India - New Zealand Joint Trade Committee (JTC) meeting: Key areas like
hospitality (including adventure tourism), nursing, telemedicine, education, air
connectivity, joint R&D, and startups were highlighted. Service sector trade was
given a special focus, alongside streamlining regulatory and quality checks.
34
◊ 5
th
meeting of ASEAN-India Trade in Goods Agreement Joint Committee: Held in
Jakarta from July 29 to August 1, 2024, the meeting reviewed outcomes from the
third round of negotiations on national treatment, market access, rules of origin,
trade remedies, and other trade-related issues, guiding sub-committees on key
points.
35
29
https://www.thehindu.com/business/Economy/interest-equalisation-scheme-for-exporters-extend-
ed-till-september-30/article68605675.ece#:~%20:text=to%20June%2030.-,The%20scheme%20helps%20
exporters%20from%20identified%20sectors%20and%20all%20MSME,post%2Dshi%20pment%20
rupee%20export%20credit.
30
https://www.businessgo.hsbc.com/en/article/rodtep-scheme-benefits-and-requirements-for-indian-ex -
porters
31
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2037378
32
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1938008
33
https://pib.gov.in/PressReleasePage.aspx?PRID=2053748
34
https://pib.gov.in/PressReleasePage.aspx?PRID=201940
35
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2041086
Trade Watch April-June (Q1) FY25
April-June (Q1) FY25
TRADE WATCH
QUARTERLY 2Trade Watch April-June (Q1) FY25 5Trade Watch April-June (Q1) FY25 6Trade Watch April-June (Q1) FY25 7Trade Watch April-June (Q1) FY25 8Trade Watch April-June (Q1) FY25 10Trade Watch April-June (Q1) FY25 12Trade Watch April-June (Q1) FY25 iTrade WatcJBApril-June (Q1) FY25
Executive Summary
The impact of international trade on development outcomes have intensified as it
has been proven that cross border trade is correlated with rising living standards and
poverty reduction
1
.
India’s trade landscape is rapidly evolving in response to global challenges and
opportunities. In this context, the Trade Watch Quarterly Report Q1’FY25 offers a
comprehensive analysis of India’s trade performance, assessing trade dynamics,
identifying potential sectors and key markets while also analysing the impact of
geopolitical tensions.
India’s total trade in H1 2024 reached $576 billion. However, the current account
balance shifted to a $9.7 billion deficit (1.1% of GDP) this quarter from US$ 8.9 billion
(1% of GDP) in Q1’FY24, driven largely by a widening merchandise trade deficit
2
.
The report highlights the resilience of India’s aggregate trade performance, which
depicts stability and a modest y-o-y increase. Imports in this quarter were primarily
driven by mineral fuels and electrical machinery, accounting for about 56%, while
exports mainly consist of mineral fuels and natural & cultured pearls, making up
approximately 45% with trade to top markets (15 countries) remaining stable.
India exhibits Trade Intensity Index (TII) score of greater than 1 with 84 countries
which accounted for 67% of its exports in 2023. Moreover, India shows a comparative
advantage (RCA > 1) in 43 commodities—representing 40% of global imports —which
constitute 68.2% of its goods export portfolio. The report also analyses commodities at
the HS-6 level to provide insights into potential product markets.
Finally, it identifies geopolitical opportunities and challenges posed to India’s trade
and particularly examines the potential impact of the Carbon Border Adjustment
Mechanism (CBAM).
1 https://www.wto.org/english/blogs_e/data_blog_e/blog_dta_24apr24_e.htm#:~:text=Increased%20trade%20
has%20coincided%20with,17%20to%2032%20per%20cent.
2 https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=58783 iiTrade WatchBApril-June (Q1) FY25
ADVISORY BOARD
S. No.Board MemberAffiliation
1 Harsha Vardhana Singh Former Executive Director, Brookings India
2 Santosh Kumar Sarangi Additional Secretary & Director General, DGFT
3 Pravin Krishna Professor, 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 iiiTrade WatcJBApril-June (Q1) FY25
HIGHLIGHTS
1. India’s total trade in H1 2024 experienced a 5.45% y-o-y increase compared to 2023.
2. Merchandise imports showed consistent growth, with Q1 FY25 exports rising by
5.95% to $110 billion and imports increasing by 8.40% to $173 billion, leading to a
growing trade imbalance.
3. In Q1 FY25, Indian iron and steel exports experienced a massive decline (33%)
primarily due to weak domestic demand and excess capacity in China which
resulted in an oversupply of steel in the global markets.
4. In Q1 FY25, North America accounted for 21% of India’s exports, followed by the EU
at 18.61%. Imports were largely from Northeast Asia, West Asia (GCC), and ASEAN,
making up 51% of total imports.
5. During Q1 FY25, export growth to FTA partners was notably strong at 12%, while
import growth from these partners was 10.29%.
6. India’s Trade Intensity Index (TII) > 1 with 84 countries, representing 38.82% of
global GDP, and 67% of India’s exports, underscores its strong global trade ties.
7. India shows a comparative advantage (RCA > 1) in 43 commodities—represent 40%
of global import and constitute 68.2% of merchandise exports.
8. In 2023, India’s exports accounted for 1.71% of global imports. It captured only 9.61%
of the most widely demanded commodities, which represent 68% of the global
import basket.
9. In 2023, among 7 emerging economies, India’s share in world exports was better
than its peers in mineral fuels and products, natural and cultured pearls and
pharmaceutical products.
10. Several labour-intensive sectors such as natural and cultured pearls, lac, gums and
resins, manmade filaments and articles of leather have seen a decline in India’s
share in global exports in the recent years as compared to 2015.
11. India’s share in global services exports has more than doubled, reaching
approximately 4.6% in 2023 from 2% in 2005. It accounts for 10.20% of the world’s
services exports in IT services and 7.16% in other business services. ivTrade Watch April-June (Q1) FY25 vTrade WatchBApril-June (Q1) FY25
Contents
1. India’s Trade Analysis������������������������������������������������������������������������������������������������������������������������������������������������1
1.1. Merchandise and Services Analysis������������������������������������������������������������������������������������������������������1
1.2 Compositional Analysis���������������������������������������������������������������������������������������������������������������������������������2
1.3. Trade Direction��������������������������������������������������������������������������������������������������������������������������������������������������5
1.4. Regional Analysis��������������������������������������������������������������������������������������������������������������������������������������������6
2. Trade with FTA Partners���������������������������������������������������������������������������������������������������������������������������������������7
3. Scope to Leverage International Trade �����������������������������������������������������������������������������������������������������9
4. Does Export Comparative Advantage Play a Role��������������������������������������������������������������������������� 10
5. Mapping of India’s Exports with Global Demand�������������������������������������������������������������������������������11
6. Comparative Analysis with Emerging Economies��������������������������������������������������������������������������� 13
7. India’s Trade with Key Partners: Scope for Strategic Tie-ups����������������������������������������������������14
8. Evolving Trends in India’s Global Market Share: Fall and Rise��������������������������������������������������15
9. Is Geopolitical Turmoil Navigating Price Indices?����������������������������������������������������������������������������� 17
10. Potential Risks to India’s Trade due to CBAM�����������������������������������������������������������������������������������18
11. Recent Geopolitical Developments Affecting International Trade���������������������������������������19
12. Recent Development in India’s Trade Policy���������������������������������������������������������������������������������������21 1Trade WatchBApril-June (Q1) FY25
1. India’s Trade Analysis
Global growth is projected to be 3.3% in 2025
3
, slightly higher than previous forecasts
due to unexpected resilience in the US and some large emerging markets. With
growing uncertainty, the analysis of trade performance, composition, direction and
potential sectors has much significance for policy practitioners.
India’s trade performance showed improvement in the first half of 2024 compared
to 2023. In the first half (H1) of 2024, total trade amounted to $576 billion, reflecting a
y-o-y increase of 5.45%. Exports rose by 5.41% y-o-y to reach $231 billion, while imports
grew by 5.48%, reaching $345 billion (Figure 1).
Figure 1: Trade performance in the H1 of 2024
5.45%
5.41%
5.48%
5.36%
5.38%
5.40%
5.42%
5.44%
5.46%
5.48%
5.50%
0
100
200
300
400
500
600
Total Trade Export Import
USD Billion
Jan-Jun 2023 Jan-Jun 2024
Change % (RHS)
Source: Department of Commerce, MoC&I, GOI
1.1. MERCHANDISE AND SERVICES ANALYSIS
In June 2024, merchandise exports grew modestly by 2.48% y-o-y, reaching $35
billion, while imports saw a more significant rise of 5.94%, amounting to $57 billion
(Figure 2). This trend of rising imports is consistent over a longer horizon, as reflected
in Q1 FY25, where exports increased by 5.95% to $110 billion, and imports surged
by 8.40% to $173 billion compared to Q1 FY24. This indicates a robust demand for
imported goods, contributing to a growing trade imbalance. (Figure 3)
Figure 2: Merchandise Trade (Monthly) Figure 3: Merchandise Trade (Quarterly) 2.48%
5.94%
0%
2%
4%
6%
8%
0
10
20
30
40
50
60
June (EX) June (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
5.95%
8.40%
0%
2%
4%
6%
8%
10%
-
50
100
150
200
Q1 (EX) Q1 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
Source: Department of Commerce, MoC&I, GOI
3
https://www.imf.org/en/Publications/WEO/Issues/2024/07/16/world-economic-outlook-update-ju-
ly-2024#:~:text=Global%20growth%20is%20projected%20to,is%20complicating%20monetary%20policy%20
normalization. 2Trade WatcJBApril-June (Q1) FY25
India’s monthly services exports have reached nearly $29 billion, marking a 3.70%
increase in June 2024, while imports, at around $15 billion, declined by 3.80%
compared to 2023. Over the longer term, in Q1 FY25, services exports grew by
10.09% to $89 billion, with imports also rising by 9.09% to $48 billion.
Figure 4: Services Trade (Monthly) Figure 5: Services Trade (Quarterly) 3.70%
-3.80%
-6%
-4%
-2%
0%
2%
4%
6%
-
5
10
15
20
25
30
35
June (EX) June (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
10.09%
9.09%
0%
2%
4%
6%
8%
10%
12%
-
10
20
30
40
50
60
70
80
90
Q1 (EX) Q1 (IM)
US $ Billion
FY 2024 FY 2025 y-o-y % (RHS)
Source: Department of Commerce, MoC&I, GOI
1.2. COMPOSITIONAL ANALYSIS
Merchandise Exports
In Q1 FY25, the leading sectors were mineral fuels (19.96%)
4
, electrical machinery
and equipment (8.68%), and nuclear reactors (7.30%) (Figure 6). However, slower
export growth was noted due to significant declines in key sectors, with iron and
steel dropping by 33% and natural or cultured pearls by 3.56% (Figure 7). India’s
steel exports declined due to China’s dominance in global markets, driven by a
gradual increase in their production capacity, which lowered prices and reduced
export opportunities
5
.
Figure 6: Composition of Exports19.96%
8.68%
7.30%
6.63%
5.29%
4.93%
4.50%
2.61%
2.14%
2.13%
0%5%10%15%20%25%
Mineral fuels
Electrical Machinery
Nuclear reactors
Natural or cultured pearls
Pharmaceutical
Vehicles other than railway
Organic chemicals
Cereals
Articles of iron or steel
Iron and steel
Source: Department of Commerce, MoC&I, GOI
4
India remains a substantial exporter of refined petroleum products and other mineral fuels. The primary
destinations for these exports include the Netherlands, the United Arab Emirates, and the United States.
As the global energy landscape evolves, India’s trade dynamics in mineral fuels will likely continue to adapt
to both domestic needs and international market conditions. - https://trendeconomy.com/data/h2/India/2
5
https://www.crisil.com/en/home/our-analysis/views-and-commentaries/2024/06/steel-smarting.html -
India’s steel exports declined due to China’s dominance in global markets, lowering prices and reducing
export opportunities. On the other hand, Indian steel mills have also adopted a mixed export strategy,
prioritizing the domestic market when prices were favorable, which have also contributed to the drop. 3Trade WatcJBApril-June (Q1) FY25
Figure 7: y-o-y Q’1 Exports11.92%
16.04%
14.86%
-3.56%
11.12%
7.71%
6.70%
-6.66%
-0.65%
-33%
-40% -30% -20% -10% 0% 10% 20%
Mineral fuels
Electrical Machinery
Nuclear reactors
Natural or cultured pearls
Pharmaceutical
Vehicles other than railway
Organic chemicals
Cereals
Articles of iron or steel
Iron and steel
Source: Department of Commerce, MoC&I, GOI
The predominant import sectors include mineral fuels (35%)
6
, electric machinery
(11%), natural and cultured pearls (10%) and nuclear reactors (8%). The increase
in imports was driven by a significant y-o-y rise of 30.38% in aircraft, spacecraft,
and parts, followed by a 19.60% increase in animal or vegetable fats and oils, and
a 13.96% growth in mineral fuels. On the other hand the imports growth has
remained zero for sectors such as Iron & Steel, Organic chemical and Natural or
cultured pearls.
Figure 8: Composition of Imports35.25%
11.11%
9.62%
8.49%
3.87%
3.12%
2.46%
2.25%
2.10%
1.89%
0% 10% 20% 30% 40%
Mineral fuels
Electrical machinery
Natural or cultured pearls
Nuclear reactors
Organic chemicals
Plastic and articles
Animal or vegetable fats and oils
Iron and steel
Aircraft & spacecraft
Optical, photographic
Source: Department of Commerce, MoC&I, GOI
7
6
In 2024, India’s trade in mineral fuels continues to play a crucial role in its economy. The country imports
significant quantities of mineral fuels, primarily crude oil, coal, and petroleum gases. - https://trendecono-
my.com/data/h2/India/27
7
For the purpose of this analysis, the top 10 commodities, based on their highest share exports/imports
during this quarter, were examined 4Trade WatcJBApril-June (Q1) FY25
Figure 9: y-o-y Q’1 Imports13.96%
8.26%
0%
8.67%
-0.01
1.14%
19.60%
0%
30.38%
9.14%
-10% 0% 10% 20% 30% 40%
Mineral fuels
Electrical machinery
Natural or cultured pearls
Nuclear reactors
Organic chemicals
Plastic and articles
Animal or vegetable fats and?
Iron and steel
Aircraft & spacecraft
Optical, photographic
Source: Department of Commerce, MoC&I, GOI
Service Exports
As of 2023, India’s share in global services exports has increased significantly,
reaching approximately from 2% in 2005
8
. India accounts for 10.20% of the world’s
service exports in IT services and 7.16% in other business services.
Travel, transport, and financial services constitute 19.23%, 17.08%, and 8.61% of
the global export basket, respectively. However, India’s share in these categories
remains relatively low at 2.12%, 2.17%, and 1.25%, respectively (Figure 10). These
figures suggest there is significant potential for Indian service exporters to
expand their presence in major export markets such as the USA, Germany, the
UK, Ireland, Netherlands, etc. Services exports has provided a pathway for the
post-Covid recovery of India (Figure 11). If intermediate value addition in services
is captured aptly, it can help further strengthen service exports.
9
Figure 10: Export share of services1.44%
1.57%
2.83%
8.61%
13.78%
17.08%
19.23%
24.62%
0% 5% 10%15%20%25%30%35%40%
Construction
Personal, cultural & recreational
services
Insurance and pension services
Financial services
IT Services
Transport
Travel
Other business services
Share in World's Service Export 2023 India's share in World's Service Export 2023
Share in India's Export 2023
Source: WTO-UNCTAD estimates
8
https://www.goldmansachs.com/insights/articles/how-india-services-economy-became-a-world-leader
9
https://unctad.org/system/files/official-document/ldc2021overview_en.pdf 5Trade WatcJBApril-June (Q1) FY25
Figure 11: Growth in Export of Commercial Services130.0
216.4
104.5
157.5
100
120
140
160
180
200
220
201520162017201820192020202120222023
Index value (2015=100)
India Index World Index
Source: WTO-UNCTAD estimates
1.3. TRADE DIRECTION
Merchandise Exports
India’s exports to its top markets (USA, UAE, Netherlands, UK, China, Singapore)
remained stable, accounting for about 43% of total exports. In Q1 FY25, India saw
positive export growth in 9 out of 10 key economies. However, declines were
recorded with China (-3.30%), compared to Q1 FY24. (Figure 12)
Figure 12: India’s goods exports to major destinations-20%
0%
20%
40%
60%
80%
100%
0
5
10
15
20
25
USD Billion
Q1 FY24 Q1 FY25 y-o-y growth % (RHS) % share in India's exports Q1'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
10
USA, UAE & Netherlands are the top importers of Indian goods, accounting for
almost 33% of the total merchandise exports (Figure 12). India’s import exposure
to its top markets (China, Russia, UAE, USA, Iraq, Saudi Arabia, and Indonesia)
remained stable, making up nearly 53% of total imports. In Q1 FY25, India recorded
significant y-o-y import growth with Russia (19.69%), UAE (35.67%), and Iraq
(27.64%), compared to Q1 FY24. However, imports saw a decline with Saudi Arabia
(-1.70%), Singapore (-1.93%), and Switzerland (-10.01%). (Figure 13)
10
For the purpose of this analysis, the top 10 destinations were examined based on their export shares in the
total exports for this quarter. 6Trade Watch April-June (Q1) FY25
Figure 13: India’s goods imports from major destinations-20%
-10%
0%
10%
20%
30%
40%
0
5
10
15
20
25
30
USD Billion
Q1 FY24 Q1 FY25 y-o-y growth % (RHS) % share in India's imports Q1'FY25 (RHS)
Source: Department of Commerce, MoC&I, GOI
11
Service Export
India’s top export and import destinations for 2021
12
were the USA, UK and
Singapore. Countries like UAE, Switzerland and Netherlands maintain strong
positions in service exports, reflecting their growing influence on India’s services
trade.
Figure 14: India’s service trade to major destinations, 20210%
5%
10%
15%
20%
25%
0
20
40
60
80
100
USD Billion
Total Services ExportTotal Services ImportShare in total service exports 2021 (RHS)Share in total service imports 2021 (RHS)
Source: WTO-OECD Balanced Trade in Services
1.4. INDIA’S TRADE: REGIONAL ANALYSIS
India’s exports are primarily directed towards North America, the EU, West Asia
(GCC), and ASEAN, while imports mainly come from Northeast Asia, West Asia
(GCC), and ASEAN.
In Q1 FY25, North America accounted for about 21% of India’s exports, followed
by the EU with 18.61% which has shown a growth rate of 11.26% and 12.33%,
respectively. However, export slowdowns were observed in Northeast Asia (share
in India’s merchandise export 7.6%) and West Africa (share in India’s merchandise
export 2.6%). (Figure 15)
11
For the purpose of this analysis, the top 10 destinations were examined based on their import shares in the
total imports for this quarter.
12
For bilateral service trade latest data available is for the year 2021. 7Trade Watch April-June (Q1) FY25
Figure 15: Region-Wise y-o-y (%) Q’1 Goods Exports growth11.26%
12.33%
12.83%
10.73%
-6.12%
7.62%
5.55%
-3.73%
-8.70%
22.74%
-10% -5% 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
Source: Department of Commerce, MoC&I, GOI
The Asian region, particularly Northeast Asia, West Asia (GCC), and ASEAN, is a key
source of India’s imports in Q1 FY25, accounting for nearly 51% of total imports. In
Q1 FY25, imports from East Asia (Oceania), the European Free Trade Association
(EFTA), and the EU contracted, while imports remained strong from ASEAN,
suggesting that FTAs have facilitated more liberalized trade flows.
Figure 16: Region-Wise y-o-y (%) Q’1 Goods Import growth7.46%
18.57%
10.87%
20.56%
-7.97%
4.70%
15.90%
7.27%
-9.43%
-19.76%
-20% -10% 0% 10% 20% 30%NE Asia
West Asia- GCC
ASEAN
Other CIS Countries
EU Countries
North America
Other West Asia
Latin America
EFTA
East Asia (Oceania)
Source: Department of Commerce, MoC&I, GOI
2. Merchandise Trade with FTA Partners
In Q1 FY25, exports to FTA partners grew by 12%, while imports grew by 10.29%. Export
growth was strong with ASEAN, UAE, Singapore, Malaysia, Sri Lanka, and Mauritius,
while imports surged from ASEAN, UAE, and South Korea. Despite exports to Mauritius
and Singapore, imports from Mauritius (-34.21%) and Singapore (-1.93%) declined. 8Trade Watch April-June (Q1) FY25
Figure 17: Exports- FTA Countries-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
0
2
4
6
8
10
12
USD Billion
t?uMt ux3?)?3 "DC #D t?ux )0, t?uM S ??
Source: Department of Commerce, MoC&I, GOI
Figure 18: Imports- FTA Countries-40%
-20%
0%
20%
40%
0
5
10
15
20
25
USD Billion
t?uMt ux3?)?3 "DC #D t?ux )0, t?uM S ??
Source: Department of Commerce, MoC&I, GOI
India’s efforts to enhance bilateral FTAs now include a component of the services
sector. Some of the key measures aimed at boosting service exports are as follows:
Few Measures taken by India to Strengthen Bilateral Service Exports
• India-UAE CEPA: UAE is the third largest trading partner and second largest export
market for India. Signed in 2022, this agreement provides Indian service providers the
opportunity to export 100 out of 160 service sub sectors and UAE has offered to export 111
out of 160 subsectors to India.
13
These broadly include services across financial, insurance,
tourism business and construction.
• India-EFTA Trade and Economic Partnership Agreement: Signed on March 2024 with
comprising Switzerland, Norway, Iceland, and Liechtenstein, this agreement focuses on
enhancing the trade in financial, telecommunications, insurance and banking services.
14
• India Australia Economic Cooperation and Trade Agreement: Signed in 2022, this
agreement provides the opportunity to export 135 service sub sectors and Australia has
offered to export 103 subsectors to India. Broadly, these sectors range from business services,
communication services, construction and related engineering services and so on.
15
13
https://pib.gov.in/PressReleasePage.aspx?PRID=1921222#:~:text=CEPA%20is%20a%20full%20and,Mo -
hamed%20bin%20Zayed%20Al%20Nahyan.
14
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2013169
15
https://www.pib.gov.in/PressReleasePage.aspx?PRID=1887259 9Trade WatchBApril-June (Q1) FY25
3. Scope to Leverage International Trade
India’s Trade Intensity Index (TII)
16
score is greater than 1 with 84 countries, which
captures 38.82% of the world GDP, and 67% of India’s exports. There is still scope to
form trade partnerships with countries accounting for 60% of the world GDP.
India holds a Revealed Comparative Advantage (RCA)
17
> 1 in 43 commodities, accounting
for 68.2% of its export basket and nearly 40% of global demand. With a strong comparative
advantage (RCA ≥ 4) in four labour-intensive sectors - cotton, carpets, lac & gums, and
lead - there is a need to align policies to increase exports for these products.
Table 1: Massive scope to leverage International Trade
TII TII>1 TII<1 RCARCA>1 RCA<1
No. of
Countries (222)
84
(Share in
world GDP
~38.82%)
138
No. of
Commodities = 97
(HS 2)
43
(39.73%
share in world
imports)
54
Share in
India’s Export
Basket
67% 33%
Share in India’s
Export
68.2% 31.8%
Source: Department of Commerce, MoC&I, GOI
India shows a relatively strong RCA in IT and other business services (RCA>1). Notably,
other business services and IT services also held substantive shares in World’s service
export in 2023. The expansion in other business services has mainly been fueled by
sectors like business and management consulting, public relations, engineering
services, advertising, trade fair services, and various technical services, including
scientific and space-related services.
18
Figure 19: Services: Revealed Comparative Advantage (RCA) for 20232.40
1.68
0.83 0.80
0.51 0.50
0.34 0.29
13.78%
24.62%
1.44%
1.57%
17.08% 19.23%
2.83%
8.61%
0%
5%
10%
15%
20%
25%
30%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
IT Other
business
ConstructionPersonal,
cultural, and
recreational
Transport Travel Insurance and
pension
Financial
RCA Share
RCA 2023Share in World's Service Export 2023 (RHS)
Source: UNCTAD
16
The trade intensity index (TII) is used to determine whether the value of trade between two countries is
greater or smaller than would be expected on the basis of their importance in world trade. It is defined as
the share of one country’s exports going to a partner divided by the share of world exports going to the
partner.
17
A country is said to have a revealed comparative advantage (RCA) in a given product i when its ratio of ex-
ports of product i to its total exports of all products exceeds the same ratio for the world as a whole. If RCA
takes a value greater than unity, the country has a revealed comparative advantage in that product.
18
https://www.indiabudget.gov.in/economicsurvey/doc/echapter.pdf 10Trade WatchBApril-June (Q1) FY25
4. Does Comparative Advantage play a critical role?
India’s export performance reveals a divergence across commodities: low RCA
commodities performed well, while weak and medium RCA commodities stagnated,
necessitating targeted policy support.
At aggregate level (HS- 2 digit), 54 commodities with lower comparative advantage
(0 < RCA ≤ 1) have performed better in this quarter. Exports in these commodities
increased by 11.77% YoY in June 2024 and 12.38% during the April-June 2024 period,
contributing 32% to total exports. (Figure 20)
In contrast, there are 25 commodities with weak comparative advantage (1 < RCA ≤
2), but where 45% of commodities are present and have faced a significant 4.11% YoY
decline in June 2024. The contraction suggests sectoral vulnerabilities, potentially due
to global trade tensions or domestic challenges.
Medium comparative advantage (2 < RCA ≤ 4) in 14 commodities exhibited tepid
growth, with a 1.36% increase in June 2024 and 4.58% over the April-June period,
representing 21% of total exports.
Strong comparative advantage (4 < RCA) in 4 commodities (Cotton, Carpets, Lac &
gums, Resins and Lead and Articles thereof) remained resilient, with exports growing
by 11.96% during the April-June period, yet they constitute only 2% of the total
exports. This growth underscores the robust performance of India’s labour-intensive
manufacturing. However, the limited number of these high-RCA commodities
suggests a strategic imperative to diversify and expand India’s export portfolio.
Figure 20: Growth performance of exports of potential products32%
45%
21%
2%
0%
10%
20%
30%
40%
50%
-8
-4
0
4
8
12
16
0<RCA?1 1<RCA?2 2<RCA?4 4<RCA
Share (%)
y-o-y Growth (%)
Jun'24 Apr-June'24 Share (RHS)
Source: Department of Commerce, MoC&I, GOI & NITI’s own calculation
At dis-aggregate level analysis (HS-6 digits), 4422 commodities constituting 68% of
the world’s imports, but India’s export share is only 0.26% of the world’s demand as
illustrated in Table 2. On the other hand, although these 434 commodities make up
just 2.9% of global imports, India captures a significant 18.53% share of exports in these
products. India has to strengthen its position in broader global markets (where its
presence is currently low) while maintaining its competitive edge in niche segments.
(Table 2) 11Trade WatchBApril-June (Q1) FY25
Table 2: India’s Exports Presence in Global Demand
Average Share
% (2019-2023)
Particulars
2023 (US$
billion)
Share % in 20232023
Category
India’s export
share in World’s
import
Number of
6HS items
India’s
Exports
World’s
Imports
India’s
Export
Basket
World’s
Import
Basket
India’s Export
Share %
in World’s
Import
Category 1Less than 1% 4,422 41.5216,005.479.61 67.99 0.26
Category 2
Between 1% -
5%
1,389 135.915,299.2831.4622.51 2.56
Category 3
Between 5% -
10%
384 127.871,553.3329.6 6.6 8.23
Category 4More than 10% 434 126.68683.7629.332.90 18.53
Total of the
above
6,629 431.9823,541.84100 100 1.71
Source: ITC Trade Map & NITI’s own calculation
5. Mapping of India’s Exports with Global Demand
This section maps India’s supply of major export products to that of the top three
exporting countries in each category for their exports utilizing yearly data of 2023. This
analysis highlights trade patterns in India’s exports that can inform strategy. (Table 3).
The USA is a critical market across all product categories followed by UAE and
Netherlands. China is the main competitor in several key product categories
highlighting the need for India to enhance competitiveness in these products. India
has a solid foothold in developed markets like the USA, UK, and Germany, across top
product categories but there are opportunities to explore emerging markets.
Table 3: Mapping of India’s Supply with Leading Exports and their Prime Destinations, 2023
Supply SideDemand Side
India’s top
export
destinations
Country’s
share in
India’s exports
of respective
product
category
Share of
product
category in
India’s total
exports to
respective
country
Leading global
exporter in
respective
product world
market
Top destinations of
leading global exporter
in respective Product
Minerals fuels & products
Netherlands16.8 64.9USA (10.2)
Mexico (13.9),
Netherlands(9.5), Canada
(8.9)
UAE 8.422.6Russia (8.2)
China (21.5), Netherlands
(15.8), Germany (5.8)
USA 7.38.6Saudi Arabia (8)
China (17.3), Japan (12.2),
South Korea (11) 12Trade WatcJBApril-June (Q1) FY25
Supply SideDemand Side
India’s top
export
destinations
Country’s
share in
India’s exports
of respective
product
category
Share of
product
category in
India’s total
exports to
respective
country
Leading global
exporter in
respective
product world
market
Top destinations of
leading global exporter
in respective Product
Natural or Cultured pearls
USA 30.4 13.4
Switzerland
(14.7)
China (23.1), India (11.5),
Turkey (11)
UAE 22.6 23Hong Kong (9.4)
China (52.3), USA (7.1), UAE
(6.4)
Hong
Kong
21.8 83.4UK (9.3)
Switzerland (37.7), China
(22), Hong Kong (9.7)
Electrical machinery & Equipment
USA 30.6 13.05 China (27.6)
Hong Kong (16.9), USA
(13.9), South Korea (5.1)
UAE 11.2 11
Hong Kong
(21.7)
China (63.6), USA (4.4),
India (4)
UK 5.312.77 Taipei (9.9)
China (27.6), Hong Kong
(21.7), Singapore (9.9)
Nuclear reactors
USA 20.4 7.9China (20)
USA (17.4), Hong Kong
(7.1), Russia (4.9)
Germany 5.215.8Germany (10.7)
USA (12.5), China (7.9),
France (7.3)
Singapore4.911.9USA (9.1)
Canada (22.6), Mexico
(19.6) , China (5.9)
Pharmaceuticals products
USA 35.4 10Germany (14.3)
USA (22.9), Netherlands
(9), Switzerland (6.8)
UK 34.7
Switzerland
(11.9)
USA (31), Germany (10.6),
Slovenia (6.4)
South
Africa
2.97.8USA (10.8)
China (11), Netherlands
(9.5), Belgium (8.9)
Source: ITC Trade Map
Mineral Fuels & Products: These products constitute a significant share of exports
from India to the Netherlands. While the Netherlands is a key market for India, it’s also
a major destination for leading exporters like Russia and the USA.
Natural or Cultured Pearls: These products have a significant exports share in total
exports of India to these key markets such as Hong Kong, USA and UAE. However,
Switzerland and Hong Kong also have a solid presence in the same markets, particularly
China. India can focus on expanding its share in the growing Chinese market. 13Trade WatcJBApril-June (Q1) FY25
Electrical machinery & Equipment: India faces stiff competition in this sector, especially
from China, which has a much larger global share and targets similar markets (e.g.,
the USA and UAE).
Nuclear reactors: India is relatively competitive in this high-tech sector, with a
significant export presence in the USA and Germany. However, China remains the
largest global exporter.
Pharmaceutical products: India is a major player in the global pharmaceutical market,
especially in the USA. However, countries like Germany and Switzerland are also key
players, with significant market shares in the USA and other developed nations. India
should leverage its cost-effective pharmaceutical production to capture more global
demand.
Overall, by focusing on technological advancement, strategic market expansion, and
value addition, India can further enhance its global market share in these critical
industries.
6. Comparative Analysis with Emerging Economies
Table 4 compares India’s commodity share with that of its competitors in the global
market. India performs well in pharmaceutical products, cereals, and natural pearls.
Sectors like electrical machinery, nuclear reactors, and vehicles show significant
room for improvement. China is India’s leading competitor across the majority of
India’s export commodities. Brazil, Indonesia, and South Africa generally trail India
in most categories, while Malaysia and Thailand outperform India in select sectors
like electrical machinery. Understanding peer strategies could help India improve its
competitiveness in these areas.
Table 4: Comparative assessment of India’s exports with peers in Heavy-weight sectors (HS 2)
Country’s share in world’s export 2023 (%)
India’s major
export
commodities
Commodity’s
share in
world
export’23 (%)
IndiaBrazil
Indon-
esia
Malaysia
South
Africa
ThailandChina
Cereals 0.7 6.9 9.2 0 0 0.9 3.2 0.6
Natural &
Cultured
pearls
3.7 3.9 0.5 0.9 0.4 2.3 1.7 3.6
Organic
Chemicals
2.1 3.9 0.4 0.6 1 0.2 0.8 15.7
Minerals fuels
& products
13.6 2.8 1.7 1.9 1.6 0.4 0.3 1.9
Pharmaceuticals
products
3.6 2.6 0.1 0.1 0.1 0.1 0.1 1.4
Articles of
Iron & Steel
1.6 2.6 0.5 0.4 0.7 0.3 1.4 25.8
Iron & Steel2 2.5 3.1 5.6 1.2 1.4 0.3 14.6 14Trade WatchBApril-June (Q1) FY25
Country’s share in world’s export 2023 (%)
India’s major
export
commodities
Commodity’s
share in
world
export’23 (%)
IndiaBrazil
Indon-
esia
Malaysia
South
Africa
ThailandChina
Nuclear
reactors
11 1.1 0.5 0.3 0.9 0.2 1.6 20
Vehicles other
than Railways
8 1.1 0.7 0.6 0.1 0.7 1.8 10.3
Electrical
Machinery &
Equipment
14.9 0.9 0.1 0.4 3.4 0.1 1.4 26
Source: ITC Trade Map
7. India’s Trade with Key Partners: Scope for Strategic
Tie-ups
Table 5 illustrates the bilateral competitiveness and intensity of India’s major exports
across key sectors, emphasizing the extent to which Indian exports meet demand in
top destination markets.
India has established strong trade relationships with the USA and UAE in sectors like
minerals fuels, pharmaceutical products, and natural pearls. These sectors present
further opportunities for India to deepen trade ties and expand its market share. India
also has significant untapped potential in sectors like electrical machinery, vehicles,
and organic chemicals, especially in markets like the USA, China, and the UK.
Table 5: India’s Trade with Key Partners: Scope for Strategic Tie-ups
Top
Commodities
in India’s
Export Share
Share in
India’s
total
Exports
(%)
Top Partners
importing
commodity
from India
India’s share
in total
imports
of top
destinations
(%)
Partner’s
share in
India’s
exports (%)
Bila-
teral
RCA
Bila-
teral
TII
Minerals
fuels &
products
20.71
Netherlands 0.8 16.8 3.0 5.7
UAE 15.438.4 5.1 34.6
USA 1.9 7.3 1.0 1.3
Natural or
Cultured
pearls
7.75
USA 13.8 30.4 4.7 6.2
UAE 8.1
3
22.6 1.1 7.5
Hong Kong 621.8 5.0 3.6
Electrical
machinery &
Equipment
7.49 USA 2.6 30.6 0.9 1.2
UAE 8.8
3
11.2 0.8 5.1
UK3.1 5.3 1.4 1.3
Nuclear
reactors
6.79
USA 1.5 20.4 0.5 0.7
Germany 0.9 5.2 1.3 0.5
Singapore 14.9 0.8 1.2 15Trade WatchBApril-June (Q1) FY25
Top
Commodities
in India’s
Export Share
Share in
India’s
total
Exports
(%)
Top Partners
importing
commodity
from India
India’s share
in total
imports
of top
destinations
(%)
Partner’s
share in
India’s
exports (%)
Bila-
teral
RCA
Bila-
teral
TII
Pharmac-
euticals
products
4.94
USA 6.2 35.4 1.8 2.3
UK3.4 3.0 1.4 1.3
South Africa 24.8 2.9 3.5 14.1
Vehicles
other than
Railways
4.83
USA 0.7 12.4 0.3 0.4
Mexico 3.2 8.1 3.1 1.5
Saudi Arabia 5.1 7.9 1.0 3.9
Organic
Chemicals
4.52
USA 5.8 13.1 1.6 2.1
China 36.3 4.0 1.4
Netherlands 3.3 5.2 1.9 3.5
Iron & Steel
2.74
Italy 7.3 14.9 5.3 3.8
Nepal 91.5 7.2 1.3 49.9
Belgium 4.7 6.0 3.4 2.7
Cereals
2.62
Saudi Arabia 16.9
19
11.4 5.8 21.7
Iran 13.1 6.5 7.0 19.5
Iraq 13.7
20
6.5 4.6 18.4
Articles of
Iron or Steel
2.26
USA 5.4 28.3 2.2 2.8
UAE 10.1 5.9 0.9 6.2
Saudi Arabia 7.5 4.9 1.5 5.5
Source: ITC Trade Map
India should look to strengthen partnerships with countries where bilateral TII and
RCA are already high, such as South Africa (pharmaceuticals), Saudi Arabia and Iran
(cereals) and the UAE (multiple sectors). There’s also scope to enhance exports to
major economies like the USA and European countries by focusing on niche markets
and innovative products.
8. Evolving Trends in India’s Global Market Share: Fall and
Rise
In recent years, India’s share in global trade has fallen for labour-intensive sectors
despite significant endowment.
The trade share for natural and cultured pearls has decreased due to the scarcity of
natural pearls and the rising demand for South Sea pearls, especially in China. India’s
share in the global boneless frozen beef trade has fallen due to stagnant exports,
currency crises in key importers like Egypt, and COVID-19 disruptions.
19
Latest available data is for 2022
20
Latest available data is for 2014 16Trade WatcJBApril-June (Q1) FY25
Similarly, challenges in the polyester value chain and anti-dumping duties have
lowered the share for Indian Man-made Fibre (MMF) textiles. India’s share in major
leather export markets has declined due to market instability, stiff competition, and
environmental regulations. Decreased global demand, lower cotton production, and
high prices have reduced the share for Indian cotton exports. Quality control orders and
global economic slowdowns have led to a drop in India’s textiles and apparel exports,
with certification mandates for raw materials and reduced purchasing capacity from
high inflation further impacting this decline.
Figure 21: Product categories- falling share in world trade-50%
-40%
-30%
-20%
-10%
0%
0%
4%
8%
12%
16%
20%
Meat and edible meat
Lac; gums, resins
Natural or cultured
pearls
Articles of apparel
and clothing
Man-made filaments
Articles of leather
Articles of apparel
and clothing
accessories
Raw hides and skins
Salt
Man-made staple
fibres
Other vegetable
textile fibres
Cotton
Carpets and other
textile floor coverings
Zinc and articles
thereof
Pharmaceutical
products
India's share in world exports' 15India's share in world exports' 23 Change in India's share (2015 to 2023)- RHS
Source: ITC Trade Map
The product categories exhibiting an RCA greater than 1 and significant growth in
international trade are straw, ceramic products, electrical machinery, products of
animal origin and explosives. The export growth of ceramic has been particularly in
tiles due to a surge in shipments of sanitary ware products.
21
Figure 22: Product categories- rising share in world trade
0%
100%
200%
300%
400%
500%
600%
0%
2%
4%
6%
8%
Manufactures of
straw
Ceramic products
Products of
animal origin
Explosives
Sugars
Aluminium and
articles thereof
Mineral fuels
Silk
Prepared feathers
& articles
Iron and steel
Edible vegetables
Articles of stone,
cement etc.
Coffee, tea, maté
and spices
Fish and
crustaceans
India's share in world exports' 15India's share in world exports' 23Change in India's share (2015 to 2023)- RHS
Source: ITC Trade Map
21
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1819614#:~:text=The%20Union%20Minister%20
for%20Commerce,the%20achievement%20in%20a%20Tweet.&text=The%20export%20growth%20of%20
Ceramic,Tiles%20and%20Sanitary%20wares%20products. 17Trade Watch April-June (Q1) FY25 9. Is geopolitical turmoil navigating price indices?
Following the geopolitical turmoil triggered by the war in Ukraine, the global
commodity markets have since experienced a broad based and sustained price
decline throughout 2023 and into 2024. This trend aligns with broader economic
???H2:) ???P??? H???H??? ????? ??H?2o ???H?:) ?P?HP?H?? ?????) ??
:??H2L:/?????:P//?o?o????:.
The aggregate commodity price index declined by 2.3% from April 2023 to June 2024,
driven primarily by reductions in cereal, coal, and metals prices. The deceleration
in China’s economic rebound, especially in the construction sector, contributed
:??????H?oHH??:?H?????????2??P:H2?????H??:)??????H??.????????
in the Metal Index over the same period. The Cereal Index also witnessed a notable
decline, decreasing by 26.4% from April 2023 to June 2024. The increased production
of key grains, particularly maize and soybeans, coupled with continued exports
from the Black Sea region, played a crucial role in this downward trajectory. The coal
/2??????n)i????:?i?:??2/?2/?2????.???/2??????H???.???hP?????)
2????H??:???H????2?o?????/?HH?2:?:?PH2??:???P:H??H???2??2?o/?????:
in response to evolving market conditions.
By mid-2024, the All-Commodity Index showed modest recovery observed in crude
oil prices, which rose to $200 per barrel in June 2024. However, the overall trend for
commodities in 2024 suggests a continuing moderation, particularly for industrial
metals and energy commodities. Tight global monetary conditions are expected to
persist, further weighing on construction and investment spending, particularly in
China, which continues to grapple with structural challenges in its real estate sector.
(Figure 23)
Figure 23: Price indices across key commodities
100
120
140
160
180
200
220
240
260
All commodity index APSP crude oil($/bbl) Cereal index
Coal indexMetal indexPrecious Metals Price Index
Source: IMF 18Trade WatchBApril-June (Q1) FY25
10. Potential Risks to India’s Trade due to CBAM
The European Union (EU) is India’s second-largest trading partner. In FY2023-24, the
EU accounted for 17.4% ($76 billion) of India’s total exports. India’s export growth to
the EU (27 countries), the European Free Trade Association (EFTA) (4 countries), and
other European countries, including the UK (7 countries), was 1.45%, 0.86%, and -2.68%,
respectively. India maintains a substantial positive trade balance with the EU and
other EU countries (Figure 24).
Several studies assessing the EU’s Carbon Border Adjustment Mechanism (CBAM)
identify African and Asian countries as the most vulnerable to its effects. CBAM, aimed
at preventing carbon leakage, and will apply to high-risk imports such as cement,
iron and steel, aluminium, fertilizers, electricity, and hydrogen starting January 2026.
It requires the purchase of CBAM certificates, reflecting the carbon emissions linked
to these goods.
For India, the iron and steel industry, representing 23.5% of its EU exports, faces the
highest exposure under CBAM (Figure 25). Indian firms may incur tariffs of 20-35%,
leading to higher costs, reduced competitiveness, and lower demand in the EU
market. Additionally, compliance costs will rise due to the need for detailed emissions
reporting.
Figure 24: India’s trade with Europe region-20
0
20
40
60
80
100
120
Import Export BOT Import Export BOT
2022-232023-24
US $ Billion
EU EFTA Other EU
Source: MoCI
India’s CBAM Exposure Index, currently at 0.03
22
, underscores the importance of
reducing the carbon footprint of its industrial goods to remain competitive in the
EU. With geopolitical shifts and a growing emphasis on sustainability, India must
implement policy measures to ensure coherence between trade and environmental
goals, aligning its long-term trade objectives with global trends.
22
https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index#4 19Trade WatchBApril-June (Q1) FY25
Figure 25: CBAM products export to EU (2022)23.55% 9.08% 1.12% 0.61%
76.45%
90.92%
98.88% 99.39%
0%
20%
40%
60%
80%
100%
Iron & SteelAluminium FertilizersCement
Exports of Products to EU (% of
total exports)
Exports to EU Exports to Others
Source: World Bank
11. Recent Geopolitical Developments Affecting International
Trade
In 2024, the international trade landscape was heavily influenced by several significant
geopolitical developments. These events not only disrupted global supply chains but
also posed both challenges and opportunities for India’s trade relations.
(i) U.S.-China Tensions and Technology Trade Wars
23
The U.S. has implemented stricter export controls and higher tariffs on Chinese goods
to limit China’s growth and expenditure towards technological progress. This has led
to a fragmentation of global supply chains, prompting multinational corporations to
seek alternatives to Chinese manufacturing. The trade war has caused increased costs
and production delays, impacting global markets.
For India, this situation presents both challenges and opportunities. On the one
hand, India has to navigate the disruptions in the global supply chain, and be wary
of China dumping its products in Indian markets. On the other hand, India is seen as
an attractive destination for companies looking to shift their manufacturing bases
out of China. This shift offers India a chance to enhance its domestic manufacturing
capabilities, particularly in high-tech industries. However, India has seen limited
success so far in capturing the China Plus One strategy so far. Vietnam, Thailand,
Cambodia, and Malaysia have become bigger beneficiaries of the strategy. Factors
such as cheaper labour, simplified tax laws, lower tariffs and proactiveness in signing
Free Trade Agreements (FTAs) have played a critical role in helping these countries
expand their export shares.
24
(ii) West Asia Instability and Maritime Security
25
The Middle East continues to experience heightened geopolitical tensions, with conflicts
in Syria, Yemen, and the Israel-Hamas situation posing significant risks to global
23
https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index#4
24
https://sansad.in/getFile/rsnew/Committee_site/Committee_File/ReportFile/13/174/179_2023_5_12.pdf?-
source=rajyasabha
25
https://sansad.in/getFile/rsnew/Committee_site/Committee_File/ReportFile/13/174/179_2023_5_12.pdf?-
source=rajyasabha 20Trade WatcJBApril-June (Q1) FY25
stability. These tensions have raised concerns about the security of key maritime routes,
particularly the Strait of Hormuz, through which a substantial portion of the world’s oil
flows. Any disruption in this region could destabilize global energy supplies, leading to
price spikes in crude oil and supply shortages. Additionally, trade routes like the Suez
Canal face the risk of delays and increased costs due to the instability in the region.
For India, the risks are multi-dimensional. A $10 per barrel increase in oil prices is
projected to worsen India’s Current Account Deficit (CAD) by 0.5% of GDP, exacerbating
inflationary pressures and further straining trade balances
26
. India’s dependence on
the Middle East for both energy and agricultural exports makes it vulnerable, with key
markets such as Iran for basmati rice and tea seeing sharp declines.
(iii) Economic Growth in Asia and Its Impact on Trade
27
In 2024, Asia’s economic growth had a significant impact on global trade, shaping
regional dynamics. The region is projected to grow by 4.0%, with China leading
the way. China’s economy expanded by 5.2% in 2023, targeting 5% growth in 2024,
driven by fiscal policies such as monetary easing and infrastructure investments that
bolstered its manufacturing sector by 7.7% and merchandise trade by 8.7%. Other
Asian economies experienced mixed outcomes—Indonesia sustained 5.0% growth,
while Japan and South Korea saw slower expansions due to weaker exports and
tighter monetary conditions.
For India, this regional growth backdrop offers both opportunities and challenges.
After achieving 6.7% growth in FY24, India is expected to maintain robust momentum
with 6.5-7% growth in FY25, fuelled by public investment and stronger integration into
global supply chains.
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https://www.livemint.com/market/commodities/every-10-rise-in-brent-widens-indias-cad-by-0-5-analysts-
measure-impact-of-high-crude-prices-on-indian-economy-11694868044584.html
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https://www.imf.org/-/media/Files/Publications/REO/MCDCCA/2024/Update/January/English/text.ashx
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https://pib.gov.in/PressReleasePage.aspx?PRID=203497 21Trade WatchBApril-June (Q1) FY25
12. Recent Developments in India’s Trade Policy
◊ Interest Equalisation Scheme: The scheme extended until September 30, 2024,
only for MSME manufacturing exporters, aims to provide identified exporters a
cheaper source of rupee credit for pre-shipment and post-shipment activities to
improve product competitiveness in international markets.
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◊ The Remission of Duties and Taxes on Exported Products (RoDTEP): The
scheme extended until September 30, 2024, aims to neutralize taxes and duties
on exported goods. Recent extensions benefits include Special Economic Zones
(SEZs), Advance Authorisation Holders, and Export Oriented Units (EOUs) aimed at
improving supply chain flexibility.
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◊ Export Promotion Capital Goods (EPCG): Effective July 25, 2024, the scheme allows
duty-free import of capital goods aimed at building domestic capacity. It includes
an extended period for submitting Installation Certificates for imported capital
goods, a simplified composition fee structure for extending the Export Obligation
(EO) period.
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◊ Trade Facilitation: India scored 93.55% in the 2023 UNESCAP Global Survey on
Digital and Sustainable Trade Facilitation, up from 90.32% in 2021, making it the
top performer in South Asia with a score surpassing that of several developed
countries, including Canada, France, the UK, and Germany.
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◊ Trade Connect e-Platform: A single-window platform to boost international trade
for Indian MSME exporters, offering real-time trade info and resources to connect
with government and markets. The platform also facilitates the utilization of Free
Trade Agreements, promoting higher export volumes and global competitiveness.
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◊ 11
th
India - New Zealand Joint Trade Committee (JTC) meeting: Key areas like
hospitality (including adventure tourism), nursing, telemedicine, education, air
connectivity, joint R&D, and startups were highlighted. Service sector trade was
given a special focus, alongside streamlining regulatory and quality checks.
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◊ 5
th
meeting of ASEAN-India Trade in Goods Agreement Joint Committee: Held in
Jakarta from July 29 to August 1, 2024, the meeting reviewed outcomes from the
third round of negotiations on national treatment, market access, rules of origin,
trade remedies, and other trade-related issues, guiding sub-committees on key
points.
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https://www.thehindu.com/business/Economy/interest-equalisation-scheme-for-exporters-extend-
ed-till-september-30/article68605675.ece#:~%20:text=to%20June%2030.-,The%20scheme%20helps%20
exporters%20from%20identified%20sectors%20and%20all%20MSME,post%2Dshi%20pment%20
rupee%20export%20credit.
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https://www.businessgo.hsbc.com/en/article/rodtep-scheme-benefits-and-requirements-for-indian-ex -
porters
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https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2037378
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https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1938008
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https://pib.gov.in/PressReleasePage.aspx?PRID=2053748
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https://pib.gov.in/PressReleasePage.aspx?PRID=201940
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https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2041086