The ministry of commerce and industry has overhauled its merchandise trade indices, shifting the base year to FY2022-23 from FY2012-13. The move aims to revamp the tracking of price and volume trends, providing a more accurate snapshot of an economy driven by high-tech manufacturing and engineering.
The Directorate General of Commercial Intelligence and Statistics, which compiles the indices, said the new series (2022–23 = 100) better reflects the current structure of India’s trade basket and global patterns.
The revision comes after more than a decade, during which India’s export composition has shifted sharply towards electronics, engineering goods, chemicals, and higher value-added manufacturing, while global supply chains have undergone restructuring.
The older FY13 base no longer adequately represented prevailing trade weights, leading to potential distortions in price and quantity measurement, a commerce ministry official said.
The overhaul follows recommendations from a committee chaired by Prof. Nachiketa Chattopadhyay of the Indian Statistical Institute, Kolkata, which reviewed the methodology, coverage, and weighting patterns. Commodity baskets at the principal commodity level have been updated, and weights recalibrated using FY23 trade values.
Methodological refinements have also been introduced in selecting the common commodity basket and handling missing unit values, while continuing to use the Laspeyres formula with fixed monthly weights, the commerce ministry said in a statement on Friday.
Key Takeaways
- The trade index now reflects India’s pivot toward electronics and engineering goods rather than the outdated 2012-13 commodity mix.
- The new indices will serve as fresh deflators, potentially leading to revisions in real GDP growth figures for the trade sector.
- The overhaul adopted ISI Kolkata recommendations, including better handling of missing data and updated weighting patterns.
- The shift allows for a more accurate measurement of whether India is getting better value for its exports relative to what it pays for imports.
- Early data for FY26 shows export volumes are generally higher than the FY23 base, though price indices remain volatile.
While the revision does not change actual export or import values, it can affect real growth estimates. The National Accounts Division under the ministry of statistics and programme implementation uses export and import unit value indices as deflators to derive real trade figures in GDP computation.
A change in base year and weights may therefore slightly alter real export and import growth rates for recent years, even if nominal trade remains unchanged.
Understanding terms of trade
The revised series also updates the measurement of terms of trade, defined as the ratio of export prices to import prices, as per the ministry. With new weights and an updated commodity mix, the movement in export and import unit value indices may differ from the earlier series, potentially changing the assessment of whether India’s terms of trade have improved or deteriorated in recent years.
Data released under the new base for FY 2025–26 (April–November) show export unit value indices moving close to the 100 mark, indicating moderate price changes relative to FY23, it said.
The export unit value index stood at 105.31 in April 2025, fell to 96.31 in June and rose to 105.32 in November. Import unit value indices ranged from 92.33 in April to 110.17 in October, before easing to 106.59 in November.
On the volume side, export quantity indices reached 116.19 in October and 113.06 in November, suggesting higher shipment volumes compared with the base year. Import quantity indices were also elevated, reaching 138.16 in April and 137.04 in October. Officials cautioned that sharp movements in quantity indices may partly reflect base effects.
The revised framework includes monthly, quarterly and annual export and import unit value and quantity indices, classification-wise indices under Principal Commodity, Standard International Trade Classification and Broad Economic Categories, as well as bilateral and region-wise indices for India’s top 20 trading partners, it said.
The indices are widely used by the Reserve Bank of India for balance of payments assessment and external competitiveness analysis, and by various ministries for trade policy review. The government said that the base year revision enhances the relevance and analytical usefulness of trade indicators at a time when India’s merchandise flows are navigating price volatility and shifting global demand.