NITI Aayog Releases Q4 Trade Watch Report Highlighting Export Diversification

The NITI Aayog has released the latest edition of its flagship publication, “Trade Watch Quarterly” for the fourth quarter (Q4) of FY 2024–25, providing a comprehensive review of India’s trade performance and outlining key insights into the evolving global trade landscape. The report was officially launched by Shri B.V.R. Subrahmanyam, Chief Executive Officer (CEO), NITI Aayog, on October 6, 2025, in New Delhi.

The Q4 FY25 edition offers a detailed assessment of India’s merchandise and services trade, identifies emerging global demand trends, and explores strategic avenues for export diversification, with a special focus on the leather and footwear sector—one of India’s significant employment-generating industries.

India’s Trade Performance Remains Resilient in Q4 FY25

According to the report, India’s total trade during Q4 FY25 stood at USD 441 billion, marking a 2.2% year-on-year growth, signaling a phase of stabilization amid global uncertainties.

• Merchandise exports saw a modest contraction, primarily due to lower shipments of mineral fuels and organic chemicals, reflecting subdued global commodity demand.

• However, sectors such as electrical machinery, pharmaceuticals, and cereals recorded robust growth, highlighting India’s growing competitiveness in high-value manufacturing and essential goods.

• Imports rose slightly, driven by stronger domestic demand for nuclear reactors, electrical machinery, and inorganic chemicals, underscoring continued investment momentum in industrial and infrastructure sectors.

Regionally, North America emerged as the strongest export destination, growing by an impressive 25%, and now accounts for one-fourth of India’s total exports. In contrast, exports to the European Union (EU), Gulf Cooperation Council (GCC), and ASEAN countries moderated due to weaker demand and supply-side adjustments.

On the import front, the United Arab Emirates (UAE) surpassed Russia to become India’s second-largest supplier, largely due to increased gold imports facilitated under the Comprehensive Economic Partnership Agreement (CEPA). Meanwhile, imports from China surged, driven by continued demand for electronics and intermediate goods.

Leather and Footwear Sector: Unlocking India’s Potential

One of the key analytical features of this edition is a sectoral deep dive into India’s leather and footwear industry, which employs nearly 4.4 million people—a large share of whom are women and workers from micro and small enterprises.

The report notes that India retains global competitiveness in processed leather and niche apparel segments, but its overall contribution to the USD 296 billion global leather and footwear market remains modest, at just 1.8%.

As global consumers and brands increasingly shift toward non-leather, sustainable, and eco-friendly materials, India faces both challenges and opportunities. To scale up its share in global value chains, the report recommends:

• Modernizing MSMEs and promoting cluster-based development;

• Enhancing R&D and technology adoption to improve productivity and quality;

• Investing in design-driven innovation and sustainability certifications;

• Building green manufacturing hubs aligned with international standards and buyer expectations.

The publication emphasizes that aligning with these global trends will be crucial for India to achieve greater market penetration in Europe, North America, and East Asia, where consumer preferences are shifting towards sustainable, ethically produced goods.

CEO’s Remarks: Diversification and Agility Are Key

Speaking at the release event, Shri B.V.R. Subrahmanyam praised the team behind Trade Watch Quarterly for presenting a “data-driven and forward-looking assessment of India’s trade dynamics.”

“India’s trade resilience is being shaped by the rise of services exports, aerospace components, and high-value manufacturing. We must continue to diversify our export base and strengthen our position in emerging sectors such as non-leather footwear, renewable technologies, and electronics manufacturing,” he said.

He further noted that the coming years will require India to adapt swiftly to shifting global demand, strengthen supply chain integration, and capitalize on free trade agreements (FTAs) with key partners. He also emphasized the importance of monitoring geopolitical realignments and trade policy shifts to sustain India’s export momentum.

Emerging Global Trends and Policy Recommendations

The Trade Watch Quarterly Q4 FY25 underscores several macro-trade trends and policy insights, including:

1. Resilience in Services Exports: India’s services exports continue to outperform merchandise trade, driven by IT, financial services, and engineering design.

2. Export Diversification Imperative: Concentration in a few markets and product categories increases vulnerability; expanding into high-demand sectors such as semiconductors, EV components, and medical devices is critical.

3. Sustainability as a Growth Driver: Green technologies and ESG compliance are shaping trade competitiveness; India must leverage this shift through targeted policies and financial incentives.

4. Supply Chain Realignment: India’s participation in regional supply chains must deepen through trade facilitation measures, logistics upgrades, and greater ease of doing business.

Accessing the Report

The fourth edition of Trade Watch Quarterly serves as an essential reference for policymakers, exporters, and trade analysts seeking to understand India’s evolving trade ecosystem. The publication can be accessed online through the official NITI Aayog website at: 🔗 https://niti.gov.in/sites/default/files/2025-10/Trade_Watch_Report_Q4_FY25_V4.pdf

Towards a Competitive, Diversified Export Future

With India’s total trade crossing USD 441 billion in Q4 FY25 and new opportunities emerging across technology and green sectors, the Trade Watch Quarterly reinforces the importance of innovation, diversification, and sustainability as cornerstones of India’s export growth strategy.

By building stronger trade linkages, enhancing domestic competitiveness, and aligning with global value chains, India is poised to consolidate its position as a resilient and forward-looking trading nation in the years ahead.