Tariff cut, reorientation of production to enhance global competitiveness: Niti Aayog

New Delhi, Jan 6 (PTI) India needs strategic measures, including reducing tariffs and reorienting production towards high-demand segments such as passenger vehicles, to enhance competitiveness and global positioning, Niti Aayog said on Tuesday.

The Aayog, in its latest edition of the 'Trade Watch Quarterly' for April–June 2025, said strengthening quality standards, certification systems, and technology adoption, alongside fostering forward linkages in global supply chains, will be critical.

"To enhance competitiveness and global positioning, India needs strategic measures that include reducing tariffs, boosting two-way trade and cross-border platform participation, and reorienting production toward high-demand segments such as passenger vehicles," it said.

The publication highlighted emerging structural shifts in India's trade profile, including the rising contribution of technology-intensive exports, the continued strength of services-led growth, and changes in import composition reflecting deeper integration into global value chains.

In addition, the thematic section of this quarter's edition focused on India's automotive exports, examining global demand patterns, India's export footprint across vehicles and auto components, tariff structures, intra-industry trade, and participation in global value chains, while identifying key challenges and policy priorities to strengthen competitiveness and export performance.

The report noted that though India has done well in specific segments of the automotive export market, there are significant opportunities to increase market share in the USD 2.2-trillion global automotive export market, which is growing.

The analysis, based on mapping of global automotive exports, India's exports, and stakeholder consultations, suggested specific policy steps to enhance competitiveness, global positioning, two-way trade, and to reorient production toward high-demand segments.

Further suggestions included strengthening quality standards, certification systems, technology adoption, and market diversification, alongside fostering forward linkages in global automotive supply chains.

Releasing the report, NITI Aayog member Arvind Virmani emphasised that strengthening India's export competitiveness, particularly in sectors such as automobiles, will be critical for sustaining long-term growth and employment generation.

Global trade in goods and services maintained its momentum in April–June 2025, expanding by about 2.5 per cent quarter-on-quarter.

The upturn was driven mainly by developing economies and rising South–South trade, even as the United States trade performance weighed on the global average.

India's overall trade position in Q1 FY26 remained stable, with total merchandise and services trade reaching USD 439 billion, growing 3.5 per cent y-o-y.

Services continued to drive the expansion, with exports from the sector rising 10 per cent and contributing to a large surplus of USD 48 billion. PTI BKS HVA