Niti Aayog: Trade Watch Quarterly
Kartavya Desk Staff
Syllabus: Economy
Source: ETV
Context: The NITI Aayog’s Trade Watch Quarterly (TWQ) report for Q1 FY25 highlights India’s trade performance, opportunities from global trade realignments, and challenges such as trade fragmentation and carbon tariffs.
Key trends and insights from the report:
• Data Points:
Regional Performance:
• North America (21%) and the European Union (18.6%) are pivotal markets. Trade with FTA partners grew by 12% in exports and 10.3% in imports.
• North America (21%) and the European Union (18.6%) are pivotal markets.
• Trade with FTA partners grew by 12% in exports and 10.3% in imports.
• Sectoral Performance: Growth sectors: IT services, pharmaceuticals, electrical machinery, and mineral fuels. Declining sectors: Labour-intensive goods like textiles, pearls, and leather.
• Growth sectors: IT services, pharmaceuticals, electrical machinery, and mineral fuels.
• Declining sectors: Labour-intensive goods like textiles, pearls, and leather.
Strategic Policy Interventions:
• Infrastructure Development: Expansion of the Trade Connect e-Platform for streamlined exporter support. Enhanced logistics under the National Logistics Policy.
• Expansion of the Trade Connect e-Platform for streamlined exporter support.
• Enhanced logistics under the National Logistics Policy.
• Export Incentives: Continued support through schemes like RoDTEP (Remission of Duties and Taxes on Exported Products).
• Continued support through schemes like RoDTEP (Remission of Duties and Taxes on Exported Products).
• Technological Integration: Emphasis on digital trade and innovation to unlock high-growth sectors.
• Emphasis on digital trade and innovation to unlock high-growth sectors.
• PLI Schemes: Scaling manufacturing in sectors like electronics, textiles, and automobiles.
• Scaling manufacturing in sectors like electronics, textiles, and automobiles.
• Strengthening FTAs: Strategic agreements with partners like the UK and EU to reduce trade barriers.
• Strategic agreements with partners like the UK and EU to reduce trade barriers.
Emerging Risks:
• Geopolitical Shifts: Opportunities from U.S.-China trade tensions but risks of overdependence.
• Opportunities from U.S.-China trade tensions but risks of overdependence.
• EU Carbon Border Adjustment Mechanism (CBAM): Tariffs of 20–35% on Indian exports of carbon-intensive goods like steel and aluminium starting 2026.
• Tariffs of 20–35% on Indian exports of carbon-intensive goods like steel and aluminium starting 2026.
• Manufacturing Challenges: High input costs and fragmented production systems reducing competitiveness.
• High input costs and fragmented production systems reducing competitiveness.
• Labour-Intensive Sector Decline: Structural inefficiencies in textiles, pearls, and leather sectors affecting global market share.
• Structural inefficiencies in textiles, pearls, and leather sectors affecting global market share.
Future Suggested Roadmap:
• Boost Digital Integration: Leverage digital platforms for trade facilitation and innovation.
• Leverage digital platforms for trade facilitation and innovation.
• Diversify Export Portfolio: Focus on high-growth sectors like IT, pharmaceuticals, and renewable energy.
• Focus on high-growth sectors like IT, pharmaceuticals, and renewable energy.
• Build Resilience Against CBAM: Invest in green technologies and align with global sustainability standards.
• Invest in green technologies and align with global sustainability standards.
• Expand Trade Agreements: Pursue FTAs with emerging economies for diversified market access.
• Pursue FTAs with emerging economies for diversified market access.
• Empower MSMEs: Simplify regulations and provide targeted credit support for small exporters.
• Simplify regulations and provide targeted credit support for small exporters.
Conclusion:
India’s trade growth is key to achieving a Viksit Bharat by 2047. Addressing inefficiencies, adopting technology, and strengthening global ties can establish India as a competitive trade leader.
Insta Links:
• NITI AAYOG
• Consider the following statements: (UPSC-2023)
Statement-I: In the post-pandemic recent past, many Central Banks worldwide had carried out interest rate hikes.
Statement-II: Central Banks generally assume that they have the ability to counteract the rising consumer prices via monetary policy means.
Which one of the following is correct in respect of the above statements?
a. Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-1
b. Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-1
c. Statement-I is correct but Statement-II is incorrect
d. Statement-I is incorrect but Statement-II is correct
Answer: a)