by admin_xw3245oj | Dec 31, 2025 | BLOG
New Delhi, 6 February 2026
By Tannaz Ahmed and Tushar Gandhi
NITI Aayog’s Trade Watch Quarterly for Q1 FY26 (April–June 2026)[1] offers a detailed snapshot of India’s trade performance at a time of moderate global recovery. While the report carries a thematic focus on automotive exports, a key insight lies in its assessment of India’s Free Trade Agreements (FTAs) and their evolving impact on trade outcomes.
Rather than revisiting the case for FTAs in principle, the quarterly examines how existing agreements are performing in practice, raising important questions about sequencing, competitiveness, and alignment with domestic production capacity.
Trade Context and FTA Exposure
In Q1 FY26, India’s total merchandise and services trade reached USD 439 billion, registering 3.5% year-on-year growth. Services exports continued to anchor overall trade performance, expanding by 10% and generating a USD 48 billion surplus, which partially offset pressures on the merchandise trade balance.
Within this broader trade context, the report notes a widening trade deficit with FTA partners, drawing attention to the evolving balance between imports and exports under existing preferential trade arrangements.
Rising Trade Deficit with FTA Partners
A key finding of the quarterly is a 59.2% year-on-year increase in India’s trade deficit with FTA partners during April–June. The widening gap reflects import growth outpacing exports, indicating that preferential market access has translated unevenly into export outcomes across sectors.
The report highlights uneven performance across FTA partner regions, including parts of ASEAN, where export growth has lagged relative to import expansion. These patterns underscore the need to examine how sectoral competitiveness and production capabilities interact with preferential trade frameworks, rather than attributing outcomes solely to the presence of FTAs.
FTAs and Structural Competitiveness
Rather than framing the FTA deficit as a short-term imbalance, the Trade Watch Quarterly places it within a broader structural context:
- Import growth from FTA partners is concentrated in intermediate and capital goods, consistent with India’s participation in global value chains.
- Export underperformance highlights the need to assess domestic competitiveness and export readiness across sectors.
This framing suggests that FTA trade outcomes draw attention to factors influencing production and export readiness, rather than market access alone.
Sectoral Signals from FTA Trade
The report highlights notable shifts in export composition that interact with FTA outcomes. Electronics exports grew 47% year-on-year, accounting for over 11% of total exports, underscoring India’s expanding role in technology-intensive value chains.
In contrast, traditional export drivers such as petroleum products saw relative decline. This divergence indicates that FTA benefits are more likely to result in sectors where India is integrated into global production networks, rather than in legacy commodity-driven exports.
Automotive Focus as an FTA Case Study
Although the report’s thematic section focuses on automotive exports, its relevance to FTAs is broader. The analysis points to India’s strong performance in auto components and select vehicle categories, alongside underexploited potential in passenger vehicles within the USD 2.2 trillion global automotive market.
From an FTA perspective, the automotive chapter illustrates how preferential access alone is insufficient without parallel improvements in competitiveness, standards alignment, and integration into global value chains. FTAs, in this sense, function as enablers but only where domestic capabilities are aligned with global standards.
Policy Implications for Future FTAs
The Trade Watch Quarterly implicitly calls for a recalibration of India’s FTA strategy, shifting the focus from coverage to performance. Key policy signals include:
- The need to sequence FTAs alongside industrial and supply-chain policies, rather than treating them as standalone trade instruments.
- Greater emphasis on tariff rationalisation and two-way trade, ensuring that imports support competitiveness rather than displacing domestic production.
- Aligning FTA outcomes with broader manufacturing and services competitiveness.
The report also underscores the importance of execution capacity, both at the policy and firm levels, in determining whether FTAs translate into sustainable export gains.
What the Quarterly Does Not Address
While the report provides a granular assessment of FTA-related trade outcomes, it does not delve into renegotiation timelines, safeguard mechanisms, or investment chapters within FTAs. Its focus remains on trade performance rather than treaty design, leaving open questions about how future agreements will incorporate lessons from current deficits.
Overall Assessment
The Q1 FY26 Trade Watch Quarterly presents a nuanced view of India’s FTA experience. The sharp rise in the trade deficit with FTA partners serves as a warning against assuming automatic gains from preferential access, while sectoral successes highlight where FTAs can work when backed by competitiveness and scale.
For policymakers and stakeholders, the message is clear: FTAs must be embedded within a broader strategy of production upgrading, value-chain integration, and execution discipline. As India continues to negotiate and recalibrate its trade agreements, the effectiveness of FTAs will depend less on their number and more on how well they align with domestic capabilities and long-term trade objectives.
[1] Trade Watch Quarterly for Q1 FY26 (April–June 2026)
by admin_xw3245oj | May 28, 2025 | In the news
While commuting in his school bus in Mumbai, 12-year-old Aarav pulls out his smartphone, not to play games, but to ask an AI chatbot to explain a complex math problem.
Meanwhile, in a rural school in Uttar Pradesh, Priya uses a similar tool to translate into English and practice pronunciation. Welcome to the new face of education, where Generative Artificial Intelligence of GENAI has the potential to transform India’s learning landscape. An August 2024 report by Gateway Consulting revealed that 60% of Indian children in cities over age 10 years used GENAI tools such as CHATGPT, Gem-ini and Claude at least once a week, primarily for educational purposes.
This statistic highlights a significant shift in how India’s next generation approaches learning and problem- solving.
The Promise of Generative AI
India’s education system serves over 250 million students and has long grappled with challenges related to access, quality, personal attention, and a customized approach. This is where GENAI offers a solution, significantly enhancing accessibility and personalization, enabling students to learn at their own pace and comfort.
Anuvadini Al, an indigenously developed GENAI translation plat-form aims at enhancing communication and education across India’s diverse linguistic landscape. Anuvadiní Foundation was established by the Ministry of Education to realize the vision in the National Education Policy 2020, of leveraging technology for teaching, learning, testing and translation.
The platform was primarily designed with the objective of bridging the gap between 22 regional Indian languages and several foreign lan-guages. It addresses the significant language barriers faced by 80% of the Indian population who speak native languages while navigating educational and professional systems primarily dominated by Hindi and English. Its advanced features can accurately translate entire books and documents into various languages while preserving their original formats. It can also produce high-quality Al images and instantly translate speech. This makes it a transformative tool for students, businesses and the government (for delivering citizen services). Children and students in rural and remote areas can now access quality education and coaching which was previously out of reach, thereby contributing to social equity.
The Global Context
Globally, the integration of Al in education is gaining momentum. U.S. schools are currently navigating a complex landscape as they consider how to incorporate generative Altools like CHATGPT into their curricula. The initial reaction was largely negative, with many institutions blocking access to these tools due to concerns about cheating and academic integrity. For instance, the Los Angeles Unified School District quickly restricted access to Openai’s website following the launch of CHATGPT, fearing it would under-mine traditional assessments. Several prominent universities in the UK, such as Imperial College London and the University of Cambridge had also issued warnings to students about the use of CHATGPT for cheating.
However, as educators have begun exploring the potential benefits of Generative Al, perspectives are shifting. Many teachers now see GENAI not just as a tool for cheating but as a resource that can enhance learning by facilitating personalized lesson plans, promoting media literacy, and making lessons more interactive. Polls indicate a significant rise in usage among both students and teachers, with nearly half of K-12 students and teachers reporting weekly use of Al tools.
In October 2022, the European Com-mission published ethical guidelines for the use of Al in education, emphasizing that educators should use Al critically. The guidelines encourage active involvement of educators in continuous learning about AI’S ethical implications and recommend schools to plan, pilot and monitor Al systems with clear policies and engage with the wider community including parents and students for better trust and understanding.
While several countries initially took steps towards implementing bans or regulating Generative AI in educational institutions, India has is yet to issue any model guidelines to educational institutions.
As these global trends unfold, it is crucial to recognize that despite the promise of GENAI in education, there are significant challenges that need careful consideration.
Challenges and Concerns
Despite its potential, adoption of GENAI in education raises certain concerns, including biases, lack of transparency regarding information
sources, over-dependence on technology, exposure to inappropriate content, and the inability to foster genuine human connections. In addition, there could be inaccuracies related to socio-political and socio-cultural matters that potentially influence children’s perspectives without proper context or critical evaluation. Furthermore, ambiguity surrounding the origin and credibility of information provided by AI systems raises questions about their accuracy and reliability, which may erode trust in Ai-generated content.
Additionally, the digital divide poses a significant challenge; while urban students like Aarav have easy access to Al tools, many in rural areas like Priya struggle with basic internet connectivity, risking further educational inequalities. The reliance on GENAI may also lead children to become less inclined to engage in research, learning, and problem-solving. This dependence could diminish their ability to rationalize, factcheck, and critically evaluate information, resulting in an incomplete understanding of complex topics. Moreover, children might view i-generated information as absolute truth without questioning its accuracy or source, leading to passive consumption of biased or misleading content that could impede their intellectual growth and development.
Concerns also arise from AI’S inability to understand social and emotional perspectives during interactions, raising doubts about its efficacy in fostering meaningful human connections and empathy in children. The potential substitution of genuine human interactions with Al could deprive children of essential social skills, empathy, and interpersonal communication abilities. Additionally, inadequate measures for age verification and ensuring child safety can lead to potential exposure to inappropriate content or topics not suitable for their age groups.
The Way Forward
As India stands at this technological crossroads, a balanced approach is crucial. The National Education Policy (NEP) 2020 acknowledges the role of artificial intelligence (AI) in transforming education, highlighting its potential in personalized learning, assessments, and skill development. It also proposes the integration of AI and other emerging technologies into the curriculum to prepare students for a rapidly changing workforce.
However, the NEP was issued in 2020, and since then, the field of Al has seen significant advancements, particularly with the emergence of Generative AI. It will not be an exaggeration to say that the use of Gen AI by students will be the norm rather than the exception.
In light of these developments, it is important to recognize that the NEP may need updates to stay relevant, especially in how it addresses learn-ing and student evaluation systems. While the NEP provides a robust overarching framework, there are areas where refinements are necessary, particularly the manner in which educators and students lever-age Generative Al for various pur-poses. Adapting the NEP to incorporate these innovations will be key to making it fully relevant and implementable in the current educational landscape.
The integration of Generative Al in education would require a multi-pronged strategy. This approach would include, on one hand, educating teachers and parents on using Generative Al effectively and its integration by schools into the curriculum, teaching students how to use these tools effectively and ethic-ally.
The focus needs to be on using Al to enhance critical thinking skills, encouraging students to question and verify Ai-generated information. Developing model guidelines which are clear and ethical for AI’S use in education will be crucial to address various aspects including privacy, bias, content moderation, using authentic sources, copyright protection and the like. Finally, initiatives to ensure equitable access to Al tools across urban and rural areas are essential for bridging the digital divide.
By embracing this technology responsibly and thoughtfully, India can pioneer a new model of education that combines the best of human teaching with the power of artificial intelligence.
As young Aarav and Priya navigate their enhanced learning journeys, they represent the face of a new India one that is tech-savvy, globally competitive, yet rooted in its rich cultural heritage. The success of this educational transformation will depend on how well we guide our children to use these powerful tools, ensuring they become not just consumers of Generative Al, but creative masters of it. The challenge now is ensuring that every child, from urban metros to the remotest villages, can benefit from this resolution, creating a future where education knows no boundaries.
by admin_xw3245oj | May 17, 2024 | In the news
Insights from the U.S.-India Biofuels Summit 2024
On 23 April 2024, the U.S. Grains Council and the U.S. India Strategic Partnership Forum organized the U.S. – India Biofuels Summit 2024 in New Delhi. The Summit brought together key stakeholders to explore the production of ethanol, which has the potential to shape the future energy landscape. Attended by global and Indian industry leaders, policymakers, and experts, the summit facilitated discussions on crucial topics such as market trends, emerging ethanol use cases, and the potential for enhanced US-India collaboration on biofuels.
Giving the opening remarks, U.S. Ambassador to India Mr. Eric Garcetti emphasized that the partnership between the U.S. and India on biofuels had the potential to be historic and help achieve sustainable development goals to protect populations vulnerable to climate risks.
India’s Ethanol Blending Program (EBP) has witnessed substantial growth, with the blending rate rising from a mere 1.53 percent in 2013-14 to an impressive 10.17 percent by 2022. Having achieved its 10 percent ethanol blending target (E10) five months ahead of schedule in June 2022, India now aims to achieve a 20 percent blend (E20) by the end of 2025. To achieve E20, India will need substantial quantities of ethanol. According to a report by Arcus Policy Research, by 2026, India will need an estimated 13.5 billion liters of ethanol, with 10.16 billion liters for fuel blending alone.
Diversifying feedstocks for ethanol production emerged as an important discussion item, which is essential if India were to achieve the required ethanol demand. While the country’s ethanol production has heavily relied on sugarcane, crops such as maize emerged as an alternative feedstock due to advantages like requiring less water, making it a more resource-efficient option. Utilizing agricultural, forestry, and industrial waste for ethanol production was also discussed, given the urgent need for waste management in India. Maximizing ethanol production while minimizing the environmental footprint is crucial, and byproducts from bioprocessing can help support a circular economy model for increased sustainability.
As the world looks to new solutions for decarbonization, Sustainable Aviation Fuel or SAF has achieved global support as a non-fossil derived fuel. The alcohol-to-jet or ATJ technology relies on abundantly available and low-carbon ethanol as a raw material to generate SAF. To successfully meet local and global SAF blending targets, India needs to develop a robust supply chain and ensure consistent, year-round availability of ethanol.
The summit also focused discussions around the immense potential for a U.S.-India partnership in enhancing climate change resilience and sustainability. The United States, with its extensive experience in improving the efficiency and sustainability of its biofuel industry, can share its experience and insights with India to support the transition to cleaner fuels.
Participants at the summit applauded India’s role in the establishment of the Global Biofuels Alliance (GBA) and added that for India, the GBA marks a significant step towards a more sustainable energy future. However, speakers highlighted that challenges such as technology transfer and geopolitical complexities continue to pose constraints for the GBA. Addressing these concerns will be crucial to ensuring the alliance’s long-term sustainability.
The U.S. – India Biofuels Summit 2024 highlighted the immense potential for a U.S.-India partnership in promoting sustainable development goals and mitigating climate risks. By leveraging their respective strengths and collaborating on innovative solutions, the two countries can lead the way in transitioning to a more sustainable energy future, benefiting both their populations and the global community.
