India Resets Trade Metrics: A New Era of Merchandise Indices

The Commerce Ministry has announced a significant update to India's merchandise trade indices, changing the base year to 2022–23 from the previous 2012–13. This shift aims to better capture the structural changes in the economy and evolving global trade patterns. The updated indices, compiled by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), are crucial for various economic analyses, including terms of trade, national accounts, and macroeconomic evaluations.

Driven by shifting commodity compositions and emerging trade trends, the change ensures that the indices align more closely with current economic realities. It also marks a response to technological advancements and global supply chain restructurings that have significantly impacted India's trade landscape over the past decade. The prior base year no longer adequately represented these dynamics.

These trade indices are vital tools for policymakers, researchers, and economists. They are used by institutions like the National Accounts Division and the Reserve Bank of India for GDP estimates and balance of payments analysis. The revision promises to enhance the relevance and reliability of the indices, ensuring they remain a critical resource for understanding trade and economic trends.