How competitive is India's trade with the world?

India's terms of trade index rose to 92.5 in 2025 from 63.7 in 1980, but remains below parity, meaning export prices still buy fewer imports than in 2015.

The chart tracks the price India receives for exports relative to what it pays for imports, benchmarked to 2015=100. A climb from 63.7 in 1980 to 92.5 in 2025 means export prices have grown faster than import prices over these 45 years. This improvement partly reflects higher global prices for refined petroleum and chemicals, which feature in India’s export basket. However, the index dipped after 2022, signaling recent headwinds. An index below 100 means every rupee of exports buys less in world markets than it did in 2015. This directly nibbles at national income and consumer purchasing power.

India's exports-to-GDP ratio reached 21.2% in 2024, far below Vietnam's 90.2% and South Korea's 44.4%.

The chart shows exports of goods and services as a percentage of GDP from 1990 to 2024. India's line has risen gradually from 7.1% to 21.2%, roughly tripling. But Vietnam's ratio exploded from 36% to over 90%, reflecting its deep insertion into electronics and textile supply chains. South Korea hovered around 50% before moderating to 44.4%, and China’s ratio peaked in the mid-2000s and now sits at 20%. The world average is 29.1%. India has become more open, but it remains far from the export-led extremes. This relative insulation is a choice, not an accident.

India's average MFN tariff in 2024 was 16.2%, more than double China's 7.5% and five times the US's 3.3%.

This line chart compares simple average MFN applied tariffs from 2005 (or 2006 for some) to 2024. India’s line is the highest throughout, drifting down from 19.2% to 16.2%. Vietnam cut its tariff from 16.8% to 9.5% as it pursued trade agreements. China's rate declined from 9.9% to 7.5%, and the US stayed flat around 3.3%. South Korea’s tariff rose slightly to 13.4%. India’s high tariffs persist because of strong domestic lobbies and a policy preference for self-reliance. They raise the cost of imported inputs and shield inefficient producers.

Trade preferences reduce India's average tariff from 14.9% (MFN) to 9.8% (effectively applied), a discount of about 5 percentage points.

Two lines chart the MFN applied tariff and the effectively applied tariff (including preferences) from 1990 to 2023. Both have fallen dramatically since the early 1990s when they were above 80%. The gap between the lines represents the tariff cut offered through bilateral and regional trade deals. In 2023, that gap was 5.1 percentage points. The effective rate is what most imports actually pay, and at 9.8% it is still high by global standards but significantly lower than the headline MFN rate. The chart shows that liberalisation happened both unilaterally and through negotiations.

India's global complexity rank improved from 57 in 1995 to 42 in 2024, but remains outside the top 40.

This single line shows India’s ECI rank from 1995. A descending line means improvement (lower rank is better). The rank fell from 57 to a low of 40 briefly in 2008, then fluctuated, settling at 42 in 2024. The improvement of 15 places is meaningful but not transformative; India is still behind dozens of smaller, more diversified economies. The ranking highlights that while India has added complexity, the rest of the world has often moved faster. For a country of India’s size and ambition, a rank in the 40s suggests substantial untapped potential.

Forward GVC participation, the share of India’s exports used as inputs in other countries' exports, fell from 44.6% in 1995 to 41.2% in 2022.

The line shows the percentage of India’s gross exports that are domestic value added embodied in intermediate goods, destined for other countries’ exports. This forward participation peaked in the late 1990s and has gently declined. It means Indian components are becoming less critical to the export bundles of other nations, perhaps because other countries have developed their own capabilities or because India’s export basket now includes more final goods. A declining forward link suggests India is not moving up the value chain as a supplier to the world’s factories as much as it could.

India’s liner shipping connectivity index reached 398 in early 2026, but China’s is 1,323 and Singapore’s is 630.

This chart compares India’s LSCI with China and Singapore quarterly since 2006. India’s index has risen steadily from 212 to 398, reflecting more frequent container ship calls and larger vessels. However, the gap with China is vast, China’s connectivity is over three times higher. Singapore, a global transshipment hub, also remains well ahead. India’s gains are real, but its ports still handle far fewer direct liner services. This affects trade costs and delivery times, making Indian exports less nimble in global just-in-time supply chains.

Agricultural tariffs average 36.7% in 2024, more than double the 13% on non-agricultural goods.

Three lines track the simple average MFN tariff for all products, agriculture, and non-agriculture from 2005. The agricultural line is consistently highest, hovering around 37% with little change. Non-agricultural tariffs have come down from 16.4% to 13%. The overall average (16.2%) is pulled up by the high farm duties. This sectoral split reveals the political economy: farm lobbies are strong and resist tariff cuts. However, high agricultural tariffs also mean Indian consumers pay more for food and miss opportunities to export processed agro-products competitively.

India’s share of world merchandise imports rose from 2.3% in 1948 to 2.8% in 2025, making it the sixth-largest importer globally.

This single line charts India’s import share since 1948. It declined in the post-independence decades, hit a low in the early 1990s, and then rose steadily as economic growth accelerated. The current 2.8% is the highest in history, reflecting India’s voracious appetite for oil, electronics, gold, and capital goods. Being a large buyer gives India some leverage in trade negotiations, but it also reflects a persistent merchandise trade deficit. The upward trend underlines India’s integration into the global economy primarily as a consumer of goods.

High-technology exports accounted for 18.6% of India’s manufactured exports in 2024, up from 9.6% in 2009.

This line shows the high-tech share of manufactured exports from 2009. The share has doubled in 15 years, driven by growth in pharmaceuticals and certain engineering products. However, 18.6% is still modest; many East Asian economies exceed 30%. The chart reveals a slow but steady shift toward higher-value goods. The data includes products like aerospace components, computers, pharmaceuticals, and scientific instruments. Missing are the massive electronics assembly exports that dominate Vietnamese or Chinese high-tech baskets. India’s trajectory is upward but not steep enough to change the narrative quickly.