**Executive Summary**
NITI Aayog released the eighth edition of the “Trade Watch Quarterly” on 23 June 2026, providing a comprehensive analysis of trade trends for Q4 FY’2025-26. The report highlights India’s trade resilience, with total trade reaching $1.84 trillion in FY’2025-26, and focuses on the pharmaceutical sector as a strategic economic pillar. Key action items include diversifying the export base, strengthening domestic production of critical inputs, and increasing participation in high-value innovation-driven segments.
**Key Points / Main Content**
**Overall Trade Performance**
* India’s total merchandise and services trade grew by 5.4% year-on-year to reach $1.84 trillion during FY’2025-26.
* India retained its status as the world’s eighth-largest services exporter in 2025, with services exports growing by 9.0%.
* While merchandise exports moderated, the services sector sustained a strong surplus, with a CAGR of 10.3% between 2015 and 2025.
**Pharmaceutical Sector Strengths**
* The sector exported $35.8 billion in products and APIs in 2025, supported by a strong manufacturing base and global competitiveness in generics and vaccines.
* India is a leading global supplier of generic medicines and a major provider of essential therapeutics and vaccines.
* Telangana, Gujarat, and Maharashtra have emerged as the primary hubs for pharmaceutical production and integration into global value chains.
**Identified Gaps and Challenges**
* Export strength is heavily concentrated in formulations and generic drugs, with limited participation in high-value segments like biologics and advanced therapeutics.
* There is a significant dependence on imported raw materials and intermediates, particularly from China, for the production of Active Pharmaceutical Ingredients (APIs).
* Despite being a major player, India’s share in the $1.3 trillion global pharmaceutical trade remains modest, suggesting untapped growth potential.
**Strategic Recommendations for Growth**
* Transitioning from a focus on generics toward innovation-driven segments such as biosimilars and advanced therapeutics.
* Strengthening domestic API production and upstream capabilities to enhance supply chain resilience and reduce import dependence.
* Enhancing competitiveness through continued investments in R&D, technology, skills, regulatory efficiency, and improved market access.
**Impact Analysis**
**Stakeholder: Pharmaceutical Manufacturers and Industry**
**Impact**
The industry is recognized as a strategic pillar but is highlighted for its limited presence in high-value segments and its vulnerability due to raw material import dependence.
**Action Required**
Industry players must invest in R&D and technology to diversify into biologics and advanced therapeutics while strengthening domestic production of critical inputs.
**Stakeholder: Policymakers and Government Agencies**
**Impact**
The document provides data-driven insights and forward-looking recommendations to guide trade policy and economic decision-making.
**Action Required**
Authorities should focus on improving regulatory efficiency, supporting cluster-based development, and negotiating better market access in key export destinations.
**Stakeholder: Researchers and Academia**
**Impact**
The publication serves as a resource for data-driven insights into global demand patterns and India's export profile.
**Action Required**
Academic and research institutions are encouraged to utilize the report’s findings to support informed decision-making and further analysis of global trade shifts.
Key Entities Referenced
Active Pharmaceutical Ingredients (APIs): A critical segment highlighted for necessary domestic production strengthening to reduce import dependence and enhance supply chain resilience.
NITI Aayog: The premier policy think tank of the Government of India responsible for publishing the trade assessment report.
Trade Watch Quarterly: A publication providing comprehensive assessments of global and domestic trade trends, with the eighth edition focusing on the pharmaceutical sector.
Pharmaceutical Sector: The primary thematic focus of the report, analyzed for its global competitiveness, export strengths in generic medicines, and value chain integration.
Telangana, Gujarat, and Maharashtra: The key states identified as the primary pillars of India’s pharmaceutical industry, driving production and exports.
NITI Aayog
NITI Aayog launches Eighth Edition of “Trade
Watch Quarterly”
Posted On: 23 JUN 2026 8:35PM by PIB Delhi
Shri Ashok Kumar Lahiri, Vice-Chairman, NITI Aayog, released the latest edition of the “Trade Watch
Quarterly” publication for Quarter 4 of FY’2025-26 (Jan-Mar 2026) on 23rd June 2026, in New Delhi. It
was released in the presence of the CEO, NITI Aayog and other senior officials.
The publication provides a comprehensive assessment of global and domestic trade trends at a time when
global trade has demonstrated resilience despite persistent macroeconomic and geopolitical uncertainties.
India's trade remained broadly stable, with total merchandise and services trade expanding by 5.4% year-
on-year (y-o-y) during April–March FY’2025-26 to reach $1.84 trillion. The thematic focus of this edition
is the pharmaceutical sector, one of India's most globally competitive industries. India is a leading supplier
of generic medicines and a major provider of vaccines and essential therapeutics, making an important
contribution to global health security. The study analyses global demand patterns vis-à-vis India's export
profile to identify untapped opportunities, while examining the sector's competitive strengths, existing
gaps, and scope for higher value addition and market diversification.
India’s trade performance in Q4 FY’2025–26 underscored the continued resilience of the external sector,
supported by robust growth in services trade. While merchandise exports moderated and imports
increased, the composition of trade remained broadly stable. Services trade remained a key source of
strength, with exports growing by 9.0%, outpacing import growth and sustaining a strong services surplus.
India retained its position as the world’s eighth-largest services exporter in 2025, with services exportsrecording a CAGR of 10.3% during 2015–2025, significantly above the global average. Overall, India’s
total trade reached $1.84 trillion during FY2025–26, with exports growing by 4.2% and imports by 6.5%,
highlighting the continued dynamism of India’s engagement with the global economy.
The thematic focus of this quarter’s edition, India’s pharmaceutical sector has emerged as a strategic pillar
of the economy, supported by a strong manufacturing base, global competitiveness in generic medicines,
and growing integration into international healthcare supply chains. Global pharmaceutical and Active
Pharmaceutical Ingredients (APIs) demand is estimated at approximately $1.3 trillion in 2025, while India
exported pharmaceutical and API products worth $35.8 billion. Supported by its strong capabilities in
generic medicines, vaccines, and essential drugs, India continues to play an important role in global
healthcare supply chains, although its share in global pharmaceutical trade remains modest, indicating
significant opportunities for future growth.
The analysis highlights that India’s export strength remains concentrated in formulations, particularly
retail medicaments and generic drugs, where it has established a strong presence across global markets.
However, the global pharmaceutical industry is increasingly shifting towards high-value segments such as
biologics, immunologicals, and advanced therapeutics, where India’s participation remains limited. In
APIs, India has strengthened its position in several specialised chemical intermediates and antibiotics, but
continues to face dependence on imported raw materials and intermediates, particularly from China.
Telangana, Gujarat, and Maharashtra have emerged as the key pillars of India’s pharmaceutical industry,
driving a significant share of the country’s production, exports, and integration into global value chains.
Their success is rooted in strong manufacturing ecosystems, cluster-based development, globally
competitive firms, and supportive policy frameworks.
The analysis highlights that India’s pharmaceutical sector is well positioned to strengthen its role in global
value chains, supported by a growing innovation ecosystem, strong manufacturing capabilities, and
increasing global demand for medicines and healthcare products. Opportunities exist to expand India’s
presence in high-value segments such as biologics, biosimilars, and advanced therapeutics, while further
strengthening domestic API production and upstream capabilities can enhance supply chain resilience.
Continued investments in R&D, technology, skills, and regulatory efficiency, alongside improved market
access in key export destinations, can support higher value addition and reinforce India’s position as a
leading global pharmaceutical manufacturing and innovation hub.
Addressing the occasion, Shri Ashok Kumar Lahiri stated that “as global trade undergoes structural shifts,
India’s ability to diversify its export base while strengthening domestic capabilities in key sectors will be
critical to sustaining growth and enhancing resilience. The pharmaceutical sector illustrates both India’s
strengths and future opportunities. While India has emerged as a leading supplier of generic medicines to
the world, the next phase of growth will depend on moving towards innovation-driven segments,
strengthening domestic production of critical inputs, and improving access to global markets.”
The edition serves as a valuable resource for policymakers, industry, researchers, and academia, offering
data-driven insights and forward-looking policy recommendations to support informed decision-making
and strengthen India’s trade competitiveness in an evolving global landscape.
The full publication can be accessed at: https://niti.gov.in/sites/default/files/2026-06/Trade-Watch-Quarte
rly-Jan-March-Q4-FY26.pdf
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MJPS/SS/PRK
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