NITI Aayog has officially launched the seventh edition of its “Trade Watch Quarterly,” providing a comprehensive analysis of India’s foreign trade performance for the third quarter of FY 2025-26.
The report highlights India’s resilience in the face of shifting global demand, noting a 1.6% year-on-year growth in merchandise exports and a robust 7.8% surge in services exports.
Thematic Spotlight: Gems and Jewellery
A central pillar of this edition is a “Deep Dive” into the Gems and Jewellery (G&J) sector. While India remains a global powerhouse in this space, the report emphasizes the urgent need for a transition from high-volume processing to high-value-added manufacturing.
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Global Standing: India currently commands a 7.8% share of the global G&J market, with exports valued at approximately $29.5 billion.
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The Value Gap: The report points out that while India dominates the “cut and polished” segment, it captures a smaller share of the final jewelry retail value compared to global design hubs.
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Lab-Grown Diamonds (LGDs): NITI Aayog identifies LGDs as a critical frontier for growth, recommending policy support to boost indigenous machinery manufacturing for diamond seeds and reactors.
Q3 FY26 Trade Performance at a Glance
The quarterly data reveals a steady, albeit cautious, upward trajectory for Indian trade.
| Indicator | Value (Q3 FY26) | Y-o-Y Growth |
| Merchandise Exports | $106.8 Billion | +1.6% |
| Merchandise Imports | $181.7 Billion | +7.9% |
| Services Exports | $94.2 Billion | +7.8% |
| Trade Deficit | $74.9 Billion | Increased |
Key Recommendations for “Value Addition”
The report moves beyond data tracking to offer strategic prescriptions for Indian exporters:
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Shift to Downstream Products: Moving from raw metal and stones to finished engineering goods and high-end jewelry.
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Addressing the MSME Financing Gap: The quarterly notes that higher collateral requirements still hinder small-scale exporters from scaling up value-added operations.
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Harnessing FTAs: NITI Aayog calls for a more aggressive utilization of recent Free Trade Agreements (like those with the UAE and Australia) to penetrate luxury markets in the Middle East and Oceania.
Navigating Global Headwinds
The analysis acknowledges that while India’s trade numbers are positive, the environment remains volatile. Factors such as the EU’s expanding carbon tax (CBAM) and fluctuating freight costs in the West Asia corridor are cited as key risks that require constant monitoring through the upcoming fiscal year.
“To reach our goal of $2 trillion in total exports by 2030, the focus must shift from ‘Volume’ to ‘Value’. The 7th Trade Watch Quarterly provides the roadmap for this transition, starting with our traditional strengths like Gems and Jewellery,” noted a senior NITI Aayog official during the launch.