In January 2026, Dr. Arvind Virmani, Member of National Institution for Transforming India (NITI) Aayog launched the 5th edition of ‘Trade Watch Quarterly (TWQ) for Quarter 1 (Q1:April-June, 2025) of Financial Year 2025-26 (FY26), in New Delhi, Delhi. The report provides a comprehensive and data-driven analysis of India’s trade performance in the context of evolving global economic conditions.
Exam Hints:
- What? Launch of NITI Aayog’s report ‘Trade Watch Quarterly’
- Launched by: Dr. Arvind Virmani, Member of NITI Aayog
- Edition: 5th
- For Which Quarter? Q1 of FY26
- Key Focus: India’s automotive exports sector
- Automotive Exports: India contributed ~USD 30 billion (1.4%) to the USD 2.2 trillion global automotive market.
- Global trade in Goods and Services: +2.5% (Q1FY26)
- Total Merchandise and Services Trade: USD 439 billion
Key Highlights of Report:
Focus:The key focus of this latest edition was India’s automotive exports sector, examining international demand patterns, India’s export presence across vehicles and auto components, tariff structures and participation in global value chains.
Auto-Components Market: The global auto-components market reached USD 856 billion in 2024, growing at a 3% CAGR since 2015, while India’s exports nearly doubled from USD 8.2 billion to USD 16.9 billion, achieving a faster 7% Compound Annual Growth Rate (CAGR) over the same period.
Automotive Exports: Since 2015, India’s share of the global automotive import market has stayed around 1%, with exports growing at a CAGR of 3.5%, slightly below the global average of 3.9%.
- The report highlighted that India, while performing well in certain automotive segments, contributes only ~USD 30 billion (1.4%) to the USD 2.2‑trillion global automotive import market in 2024, indicating significant scope to expand its share.
- Globally, passenger vehicles make up about 71% of automotive demand, but India has captured only around 1% of this market. In comparison, motorcycles account for roughly 3% of global demand, and India’s exports in this segment are about 9%, showing stronger performance.
Shifts in India’s Trade: The publication highlighted key structural shifts in India’s trade profile, including the growing contribution of technology-intensive exports, sustained strength in services-led growth, and evolving import patterns, which collectively reflect deeper integration of India into global value chains.
Goods and Services Trade: As per the report, the global trade in goods and services increased around 2.5% on quarterly basis during Q1FY26, driven mainly by developing economies and rising South-South trade, even as the United States of America (USA) trade weighed on the global average.
- It further highlighted Goods trade increased from 2% to 2.5%, while service trade rebounded.
- The report also revealed that India’s goods and services exports and imports reached USD 209 billion and USD 230 billion, respectively in Q1FY26, each increasing by around 3-4% on an annual basis, registering a combined deficit of USD 21 billion.
Services Sector: The report highlighted that the services sector continued to be the main driver for supporting India’s overall trade performance in Q1FY26. As per the report, India’s total merchandise and services trade reached USD 439 billion, up 3.5% Year-on-Year (Y-o-Y).
- Also, the services exports increased to 10%, contributing a large surplus of USD 48 billion.
Recommendations: The report recommended several strategic measures to enhance India’s global trade competitiveness, including reducing tariffs, promoting bilateral trade and cross-border platform participation, and reorienting production toward high-demand segments such as passenger vehicles.
- These initiatives are aimed at boosting India’s export potential and strengthening its position in international markets.
Policy Priorities: Based on global export trends and stakeholders consultations, the report outlined key policy priorities such as bolstering quality standards, improving certification systems, adopting advanced technologies, diversifying markets and building stronger forward linkages within global automotive supply chains.
About National Institution for Transforming India (NITI Aayog):
It is the premier policy think tank body of India, which came into existence on January 01, 2015 replacing the Planning Commission of India (1950).
Chief Executive Officer (CEO) – B.V.R. Subrahmanyam
Headquarters- New Delhi, Delhi
