India is urged to enhance its global competitiveness through strategic reforms, according to a report released by Niti Aayog. The policy think tank emphasizes the need for lower tariffs and a shift in manufacturing focus towards high-demand sectors, particularly passenger vehicles. The latest Trade Watch Quarterly highlights the importance of boosting two-way trade and improving India’s position in global supply chains to foster economic growth.
Strategic Measures for Competitiveness
Niti Aayog’s report outlines several strategic measures that India must adopt to strengthen its competitiveness in the global market. Key recommendations include reducing tariffs, enhancing two-way trade, and increasing participation in cross-border platforms. The report specifically points to the necessity of reorienting production towards high-demand segments, such as passenger vehicles, to capitalize on growing global markets. By implementing these strategies, India aims to improve its trade profile and better integrate into global value chains.
Shifts in Trade Profile
The report notes significant structural changes in India’s trade profile, highlighting a growing share of technology-intensive exports and sustained growth in the services sector. These developments reflect India’s deeper integration into global value chains. Services remain a crucial strength for the country, supporting overall trade performance. The report emphasizes the need for India to build on these strengths while addressing areas that require improvement, particularly in the automotive sector.
Focus on Automotive Exports
A major focus of the report is India’s automotive exports, which are seen as a vital area for growth. The analysis examines global demand trends and India’s export presence in vehicles and auto components. Despite some successes, Niti Aayog identifies significant opportunities for India to expand its share in the $2.2 trillion global automotive export market. The report outlines policy priorities such as enhancing quality standards, improving certification systems, and adopting advanced technologies to strengthen India’s position in this competitive sector.
Overall Trade Performance
The report also provides insights into India’s overall trade performance during the first quarter of FY26. It reveals that total merchandise and services trade reached $439 billion, marking a 3.5 percent increase year-on-year. Services exports saw a notable rise of 10 percent, resulting in a substantial surplus of $48 billion. Additionally, global trade in goods and services grew by approximately 2.5 percent quarter-on-quarter, primarily driven by developing economies and increasing South-South trade, despite weaker trade performance from the United States.
Digihunt is not a financial advisor and this is not investment advice.