Niti Aayog urges India to slash tariffs and pivot to passenger vehicles to capture a larger share of global trade.
A recent report by the policy advisory body Niti Aayog suggests that India should decrease trade tariffs and pivot its manufacturing focus towards high-demand sectors, particularly passenger vehicles, to improve its global standing.
In its “Trade Watch Quarterly” for the April–June 2025 period, published on 06 January 2026, the organisation called for strategic adjustments to strengthen national exports. These include rationalising tariffs, establishing robust two-way trade links, and increasing participation in international manufacturing platforms.
The report identifies several critical areas for improvement:
- Standards and Tech: Enhancing quality certifications and adopting advanced technology are considered essential for long-term export growth.
- Market potential: Although India is a major producer, it currently holds only a 1.4 percent share of the $2.2 trillion global market for motor exports.
- Strategic shift: Passenger vehicles account for 71 percent of global automotive trade, yet India’s contribution remains at just 1 percent. In contrast, India performs well in the motorcycle segment, holding a 9 percent share of a much smaller global market.
- Supply chains: Deeper integration into global value chains is highlighted as a primary driver for economic resilience.
Arvind Virmani, a member of Niti Aayog, noted that improving competitiveness in manufacturing-heavy sectors like transport is vital for sustaining economic growth and creating jobs.
SOURCE – ET AUTO
