India updates base year for merchandise trade indices to 2022–23

New Delhi: The commerce ministry on Friday said the base year of India's merchandise trade indices has been revised from 2012–13 to 2022–23 to reflect structural changes in the economy, shifts in commodity composition, evolving trade patterns and better alignment with current macroeconomic indicators.

These trade indices are compiled and published by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), an arm of the ministry.

These indices serve as important indicators of external sector price movements and are widely used for economic analysis, including national accounts compilation and assessment of terms of trade.

Over the years, the base year of the indices has been periodically revised to reflect structural changes in India's trade composition and evolving global trade patterns.

The exercise will ensure that the indices accurately represent the current structure of India's merchandise trade.

"The DGCI&S has revised the base year of India's Merchandise Trade Indices from FY 2012–13 to FY 2022–23, in view of the structural changes in the economy, shifts in commodity composition, evolving trade patterns, and the need for improved alignment with contemporary macroeconomic indicators," the ministry said.

It said that the coverage and classification of commodities have been reviewed at the Principal Commodity level to better capture emerging and declining trade items.

Over the past decade, India's trade basket has undergone substantial changes due to emergence of new commodities, technological advancements, global supply chain restructuring and changes in relative price structures.

The earlier base year (2012–13) no longer adequately reflected the prevailing trade structure.

"The revision ensures improved relevance, reliability, and analytical usefulness of the Merchandise Trade Indices for policymakers, researchers, and other stakeholders," it said.

These indices are used by key government institutions for economic analysis and policy formulation.

The National Accounts Division of the Ministry of Statistics and Programme Implementation uses the Export and Import Unit Value Indices as deflators for estimating real exports and imports in GDP compilation, while the RBI relies on these indices for external sector assessment, balance of payments analysis, and evaluation of price competitiveness.

Various Ministries and Government agencies also use them to frame and review trade-related policies and to assess movements in international prices.

In addition, academic institutions, research organizations, and economic analysts utilize Merchandise Trade Indices for empirical research, modelling, and analysis of trade dynamics and terms of trade trends and economic research.