In News:

NITI Aayog released the fourth edition of the “Trade Watch Quarterly” report for Q4 of FY 2024–25 (January–March 2025) in New Delhi. The report, unveiled by B.V.R. Subrahmanyam, CEO of NITI Aayog, provides a detailed evaluation of India’s trade performance, identifies emerging opportunities, and suggests policy directions for enhancing export competitiveness.

About the “Trade Watch Quarterly”

• Publisher: NITI Aayog
• Nature: Flagship analytical publication assessing India’s quarterly trade trends across merchandise and services.
• Objectives:
  • To offer evidence-based insights into trade patterns, export competitiveness, and sectoral challenges.
  • To guide policy interventions for strengthening India’s manufacturing ecosystem and expanding participation in global value chains (GVCs).

Key Highlights of Q4 FY 2024–25

• Total Trade: USD $441 billion, registering a 2.2% year-on-year increase.
• Annual Trade (FY25):
  • Total: USD $1.73 trillion (+6% YoY)
  • Exports: USD $823 billion
  • Imports: USD $908 billion

Merchandise and Services Trends

• Merchandise Exports: Witnessed a modest contraction, primarily due to lower shipments of mineral fuels and organic chemicals.
  • Growth Sectors: Electrical machinery, pharmaceuticals, and cereals.
• Services Exports: Reached an all-time high of $387.5 billion, led by IT, aviation, and financial services, reflecting India’s growing strength in high-value services.

Regional Trade Patterns

• Top Export Market:North America, accounting for 25% of India’s exports and growing 25% YoY.
• Moderate Growth Regions:EU, GCC, and ASEAN, showing a slowdown in demand.
• Import Trends:
  • UAE became India’s second-largest supplier, driven by gold inflows under the CEPA agreement.
  • China’s imports surged due to strong demand for electronics and machinery.

Sectoral Focus: Leather and Footwear Industry

• Employs 4.4 million people, contributing significantly to export earnings.
• India’s share in the $296 billion global market remains modest at 1.8%.
• Strengths: Competitive in processed leathers and niche apparel.
• Challenges & Opportunities:
  • Global demand shifting towards non-leather and sustainable products.
  • India must invest in R&D, MSME strengthening, green manufacturing, anddesign-led innovation to boost competitiveness and diversify exports.

Policy Insights and Way Forward

• India must:
  • Diversify its export basket to align with evolving global demand patterns.
  • Leverage trade agreements (like CEPA with UAE) to expand market access.
  • Enhance manufacturing competitiveness through innovation and integration withGVCs.
  • Strengthen non-leather footwear and sustainable sectors to tap into emerging global trends.