Trade watch: Niti Aayog calls for tariff cuts, manufacturing shift; flags passenger vehicles as key export opportunity

India needs a clear strategic push, including lower tariffs and a shift in manufacturing towards high-demand segments such as passenger vehicles, to strengthen its competitiveness in global markets, Niti Aayog said on Tuesday.In the latest Trade Watch Quarterly for April–June 2025, the policy think tank said India must also work on boosting two-way trade, increasing cross-border platform participation and improving its position in global supply chains. “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,” the report said, according to news agency PTI.The publication pointed to visible structural changes in India’s trade profile, including a rising share of technology-intensive exports, sustained services-led growth and shifts in imports that reflect deeper integration into global value chains. Services continue to remain a key strength, supporting India’s overall trade performance.A major focus of this edition was India’s automotive exports. The report examined global demand trends, India’s export presence across vehicles and auto components, tariff structures and participation in global value chains. While India has performed well in certain segments, Niti Aayog noted that there is considerable scope to expand its share in the $2.2-trillion global automotive export market, which continues to grow.Based on global export mapping and stakeholder consultations, the report outlined policy priorities such as strengthening quality standards, improving certification systems, adopting advanced technologies and diversifying markets. Building stronger forward linkages within global automotive supply chains was also highlighted as critical.Releasing the report, Niti Aayog member Arvind Virmani stressed that improving export competitiveness, especially in sectors like automobiles, will be essential for sustaining long-term economic growth and job creation.The report also noted that global trade in goods and services grew around 2.5 per cent quarter-on-quarter during April–June 2025, led mainly by developing economies and rising South–South trade, even as weaker US trade weighed on the global average.India’s overall trade position in the first quarter of FY26 remained stable, with total merchandise and services trade touching $439 billion, up 3.5 per cent year-on-year. Services exports rose 10 per cent, generating a large surplus of $48 billion.