India Revises Base Year of Merchandise Trade Indices to 2022-23

Government of India has revised the base year of India’s merchandise trade indices from 2012-13 to 2022-23. The update, announced on 20 February 2026, aims to improve the relevance, reliability, and analytical usefulness of trade data for policymakers, researchers, and industry stakeholders. The revision has been undertaken by the Directorate General of Commercial Intelligence and Statistics (DGCI&S) in view of structural changes in the economy and evolving global trade patterns.

Why Was the Base Year of India’s Merchandise Trade Indices Revised?

• The base year of India’s merchandise trade indices was revised to 2022-23 to reflect the current structure of India’s external trade.
• Since 2012-13, India’s economy has undergone major structural shifts, including changes in commodity composition, export diversification, and new trade partnerships.
• The government stated that updating the base year ensures better alignment with contemporary macroeconomic indicators and global best practices.
• The revision was carried out based on recommendations of a committee chaired by Professor Nachiketa Chattopadhyay of the Indian Statistical Institute, Kolkata.

What Changes in the Revised Trade Indices?

The India merchandise trade indices 2022–23 series includes several improvements,

• Updated commodity coverage at the principal commodity (PC) level
• Revised weighting structure based on trade values of 2022-23
• Better capture of emerging and declining trade items
• Alignment with international trade classifications

Weights have been recalculated to reflect the latest value shares in exports and imports. This makes the indices more representative of India’s current trade basket.

Expanded Coverage in the New Series

The revised base year of India’s merchandise trade indices includes detailed breakdowns such as,

• Monthly, quarterly, and annual indices
• Principal Commodity (PC) classification-wise indices
• Standard International Trade Classification (SITC) trade indices
• Broad Economic Categories (BEC) trade indices
• Bilateral and region-wise indices of top 20 export and import partners
• Terms of Trade (Gross, Net, and Income terms of trade)

This comprehensive structure enhances analytical capability for trade policy evaluation and economic forecasting.

What Are Terms of Trade?

The revision also strengthens analysis of terms of trade in India.

• Gross Terms of Trade: Ratio of export quantity index to import quantity index.
• Net Terms of Trade: Ratio of export price index to import price index.
• Income Terms of Trade: Net terms of trade adjusted for export volume.
• These indicators help assess whether India gains or loses purchasing power in international trade.

Why Base Year Revision Is Important in Economics?

• Revising the base year is a standard statistical practice to ensure economic indicators remain accurate and relevant.
• As trade patterns evolve, older base years may not reflect current realities.
• The base year of India’s merchandise trade indices now being 2022-23 ensures that policymakers get realistic insights into export-import performance and global competitiveness.
• Such revisions are similar to updates made in GDP series and Index of Industrial Production (IIP) over time.

Question

Q. The base year of India’s merchandise trade indices has been revised to:

A) 2019-20
B) 2020-21
C) 2021-22
D) 2022-23