India should focus on reducing tariffs and removing non-tariff trade barriers across the manufacturing value chain to strengthen its global competitiveness, NITI Aayog CEO B.V.R. Subrahmanyam said. He emphasized that greater market openness is essential for India to expand its manufacturing capacity and attract higher-value investments.

 

Speaking at the launch of Trade Watch Quarterly for the fourth quarter of FY25, Subrahmanyam highlighted that India currently depends heavily on imported intermediates and that the upcoming National Manufacturing Policy (NMP) aims to resolve these bottlenecks. He said the new policy will emphasize industrial clusters and create a world-class ecosystem that supports trade and innovation.

 

The NITI chief hinted that another major wave of economic reforms could be introduced before Diwali. He noted that the committee led by Rajiv Gauba has already submitted its first reports outlining recommendations for next-generation reforms and Viksit Bharat goals. Subrahmanyam, however, declined to reveal the specific measures under consideration.

 

He also expressed optimism about a possible trade deal between India and the United States, adding that both sides are working to finalize the agreement before U.S. tariffs begin to affect Indian exporters after November. Ongoing talks have focused on reducing the 25 percent reciprocal duties linked to India’s purchase of Russian crude oil.

 

According to the Trade Watch Quarterly report, India’s trade performance remained steady in Q4 FY25, with total trade reaching $441 billion, an increase of 2.2 percent compared to the previous year. Merchandise exports saw a slight decline due to weaker shipments of mineral fuels and organic chemicals, while exports of electrical machinery, pharmaceuticals, and cereals recorded healthy growth.

 

Imports grew modestly during the same period, supported by higher demand for nuclear reactors, electrical machinery, and inorganic chemicals. North America stood out as India’s strongest export destination, expanding by 25 percent and accounting for one-fourth of total exports. Meanwhile, exports to the European Union, GCC, and ASEAN regions experienced moderation.

 

On the import front, the United Arab Emirates surpassed Russia as India’s second-largest supplier, driven largely by gold imports under the Comprehensive Economic Partnership Agreement (CEPA). Imports from China also climbed, fueled by strong demand for electronic components.

 

The report noted that while India maintains a competitive edge in processed leather and select apparel products, its global share in the $296 billion leather market remains limited at 1.8 percent. With international demand shifting toward sustainable and non-leather alternatives, the country faces both new challenges and emerging opportunities.