Trade Watch Quarterly (7th Edition): Analysis of Global and Domestic Trade Trends

Recently, NITI Aayog released the 7th edition of ‘Trade Watch Quarterly’ for the third quarter of FY2026 (October–December 2025). The report provides a comprehensive assessment of global and domestic trade trends amid evolving international conditions.

Trade Watch Quarterly

¨  Trade Watch Quarterly is a periodic analytical report that evaluates India’s merchandise and services trade performance across quarters.

¨  It provides insights into sectoral trends, global demand patterns, and India’s positioning in international trade and global value chains.

¨ The report also includes thematic analyses of key sectors, offering policy-relevant recommendations to enhance competitiveness.

¨  It serves as an important tool for evidence-based policymaking and trade strategy formulation.

Key Highlights and Trends

Resilient but Mixed Trade Performance

¨  India’s trade performance in Q3 FY 2025–26 reflects a mixed yet resilient trend, with merchandise exports growing modestly by 1.6% (to $110.48 bn), while imports increased at a faster pace of 7.9% (to $202.33 bn), leading to a widening trade deficit.

¨  In contrast, services exports recorded strong growth of around 7.8% (to $111.2 bn), maintaining a significant trade surplus that supports overall external stability.

¨   Overall trade (goods + services) recorded positive growth of about 5.6% year-on-year, indicating sustained external sector activity.

Sectoral Focus: Gems and Jewellery

¨  The report highlights the gems and jewellery sector as a key pillar of India’s labour-intensive manufacturing ecosystem.

¨   The global market size (excluding raw gold) is estimated at around $378 billion, with India contributing about $29.5 billion (7.8% share) in exports.

¨     India continues to play a dominant role as a global processing hub, particularly in diamond cutting and polishing.

Evolving Trade Structure

¨   India’s trade patterns indicate stable export composition and changing import dynamics, reflecting deeper integration with global production networks.

¨   Herfindahl-Hirschman Index (HHI) trends indicate India’s exports have become more geographically and product-wise diversified, with Asia’s share moderating from ~49% to ~40% alongside rising shares of Europe (~22%) and America (over 25%) during 2017-18 to 2024-25.