On 4th December 2024, Suman Bery, the Vice Chairperson of National Institution for Transforming India (NITI Aayog) launched NITI Aayog’s latest report titled “Trade Watch Quarterly: April-June (Q1) FY25” in New Delhi, Delhi. The report provides a comprehensive overview of the country’s trade for the Q1 (April to June) of Financial Year 2024-25 (FY25).
- The report provides a holistic snapshot of India’s trade position, combining global demand-supply perspectives, sector-wise performance, and insights into emerging trade opportunities.
Key People: BVR Subrahmanyan, Chief Executive Officer (CEO), NITI Aayog; Dr. V.K. Saraswat and Dr. Arvind Virmani, members of NITI Aayog and other senior officials were present at the event.
Note: Over the decades, the contribution of trade to India’s Gross Domestic Product (GDP) has increased massively, from just 15% (in 1980) to 48% (in 2023).
Key Findings of the Report:
i.As per the report, India’s total trade performance for the 1st Half (H1) of 2024 reached USD 576 billion with Year-on-Year (Y-o-Y) growth of 5.45% compared to 2023.
ii.The report highlighted that merchandise exports showed consistent growth as exports has increased by 5.95% to USD 110 billion in Q1FY25.In Q1 FY25, the leading sectors were mineral fuels (19.96%), electrical machinery and equipment (8.68%), and nuclear reactors (7.30%).
- Imports increasing by 8.40% to USD 173 billion in Q1FY25. This significant growth in imports were mainly attributed by high-value commodities, including aircraft, spacecraft, mineral fuels, and vegetable oils.
iii.The report outlined that India’s Current Account Deficit (CAD) reached to USD 9.7 billion in Q1FY25, representing 1.1% of country’s GDP, from USD 8.9 billion (1% of GDP) in same quarter of FY24.
- This increase in CAD is mainly driven by a widening merchandise trade deficit.
iv.India’s export of iron and steel saw a massive decline of 33% in Q1FY25 mainly due to weak domestic demand and excess capacity in China which resulted in an oversupply of steel in global markets.
India’s Trade with other countries:
i.The report showed that India’s Trade Intensity Index (TII) score was greater than 1 with 84 countries, which represented 38.82% of global GDP and 67% of its total exports in 2023.
ii.As per the report, India showed a comparative advantage (RCA >1) in 43 commodities which represented 40% of global imports and constituted 68.2% of merchandise exports.
iii.The report revealed that North America accounted for 21% of India’s exports in Q1FY25, followed by the European Union (EU) (18.61%).
- While, Imports were largely from Northeast Asia, West Asia and Association of Southeast Asian Nations (ASEAN) countries which together accounted 51% of total imports.
vi.The report highlighted that various labour-intensive sectors like: natural and cultural pearls, lac, gums and resins, among others have witness a decline in India’s share in global exports in the recent years as compared to 2015.
v.The report showed that total share of India in global services exports has reached to nearly 4.6% (in 2023) compared to 2% (2005).
- While, India accounted 10.20% of the global services exports in Information Technology (IT) services and 7.16% in other business services.
About National Institution for Transforming India (NITI Aayog):
It is India’s premier policy think tank, which came into existence on 1st January, 2015 by replacing Planning Commission. It plays a crucial role in framing long-term policies and programs for the country.
Chairman- Prime Minister (PM) Narendra Modi
Headquarters- New Delhi, Delhi
