Loading...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 News - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Category: ?
Categorized by AI
---- All Categories ----
  • ---- All Categories ----
  • Income Tax
  • GST
  • Customs, DGFT & SEZ
  • FEMA & RBI
  • Corp. Laws, SEBI & IBC
  • PMLA, Black Money & ED
  • Budget
  • News and Press Release
  • PTI News
Month:
---- All Months ----
  • ---- All Months ----
  • January
  • February
  • March
  • April
  • May
  • June
  • July
  • August
  • September
  • October
  • November
  • December
Year:
---- All Years ----
  • ---- All Years ----
  • 2026
  • 2025
  • 2024
  • 2023
  • 2022
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014
  • 2013
  • 2012
  • 2011
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Axis Bank sees religious tourism, defence, MSMEs as key growth areas in UP
    Rupee falls 13 paise to close at 94.56 against US dollar
    Vimal Elaichi makers move Delhi HC against Maharashtra FDA notice to 3 actors
    As world faced turmoil, India forged partnerships to maintain its economic growth: Shah
    Haryana govt, RBI review measures to tackle financial frauds
    Union law minister Meghwal inaugurates ITAT's new premises in Kolkata
    Enabling Filing of Appeals in Cases Involving NIL or Zero Demand Amount
    DGFT Introduces Open API Facility for Certificate of Origin on the Trade Connect e-Platform
    Amid global turmoil, India maintained momentum of its economic growth, says Amit Shah
    Zaggle Brings Cricket and Business Together in Hyderabad; Hosts Padma Bhushan Dr. Sunil Gavaskar
    AI may accelerate anti-competitive practices in digital markets: CCI chief
    Union Minister of Commerce and Industry Shri Piyush Goyal Calls for India to Emerge as a Global Medical and Healthcare Destination
    Union Minister of Commerce and Industry Shri Piyush Goyal Calls for Trained Caregivers and Wider Hospital Participation in Heal in India Gateway
    Rupee falls 7 paise to close at 94.50 against US dollar
    India Must Build Resilient, Globally Integrated Healthcare Supply Chains: Commerce and Industry Minister Shri Piyush Goyal at Bharat Health Global Exp...
    Rupee rises 4 paise to 94.39 against US dollar in early trade
    Jantar Mantar student stir, mass struggles could impact Assembly polls: MA Baby
    FDA awaiting response from restaurants at Mumbai Cricket Association premises: Mundhe
    India emerges as key diesel supplier to Europe as Russian, US flows falter
    Trump keeps heralding an economic boom, but even a solid jobs report is causing problems for him
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

News
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
September 7, 2026
Show AI Summary
Digital payment transparency for religious institutions supports direct trust-account donations, reconciliation, and technology-led banking services.
Digital donation collection facilities for temples and religious establishments include kiosks, Bharat Bill Payment System payments and UPI QR-code payments. Donations may be credited directly to the relevant trust account, supported by transaction reconciliation and digital records to improve transparency and ease of transactions. Technology services also cover municipal dues payments and property-tax assessment, alongside banking support for defence-sector ecosystems, MSMEs, agriculture and priority-sector lending.
September 7, 2026
Show AI Summary
Rupee exchange-rate movement reflected crude oil pressures, domestic equity weakness, foreign inflows, and a softer dollar.
Foreign-exchange market conditions resulted in the rupee closing weaker against the US dollar after initial support from foreign currency deposit inflows. Rising crude oil prices and weakness in domestic equity markets weighed on sentiment and offset support from a softer dollar and foreign investor equity purchases. Future movement may remain influenced by foreign inflows, crude oil prices, domestic market conditions, geopolitical tensions and inflation data.
September 7, 2026
Show AI Summary
Surrogate advertising allegations challenge notices targeting brand ambassadors and raise jurisdiction and hearing concerns for product promoters.
Challenge to surrogate advertising allegations concerns notices requiring brand ambassadors promoting Vimal Elaichi to prove that it differs from prohibited pan masala, halt promotions, and remove digital materials. The product promoter contests the notices because they were addressed only to the actors, it was not heard, and the regulator allegedly lacked jurisdiction to stop the advertisements. Territorial jurisdiction to entertain the challenge is also contested.
September 7, 2026
Show AI Summary
Free trade agreements and cyber-fraud prevention feature in India's stated strategy for economic growth, security, and digital protection.
India's external economic strategy relies on diplomatic engagement, strategic partnerships and free trade agreements to sustain growth amid geopolitical uncertainty. Cooperation extends to defence, technology, energy, investment and trade, as well as digital public infrastructure, disaster relief and capacity building. Internal and border security are treated as conditions for national development, while police responsibilities include community safety, maritime protection and tourist safety. Growing cyber-fraud risks linked to the digital economy are addressed through coordination with states and the national cybercrime helpline.
September 7, 2026
Show AI Summary
Financial fraud prevention advances through accessible complaints, cyber awareness, intelligence-sharing, and AI-based detection of mule accounts.
Financial-fraud prevention measures rely on coordinated review of alleged fraud, unauthorised deposit collection, complaints, market intelligence, investor protection and cyber threats. The SACHET portal supports market intelligence and complaints concerning unregulated financial activities through multilingual and accessibility features. MuleHunter.ai uses artificial intelligence and machine learning to identify mule accounts used in fraudulent fund flows. Financial-literacy programmes and accessible educational initiatives promote safe banking, fraud awareness and coordinated responses to cyber-enabled financial crime.
September 7, 2026
Show AI Summary
Technology-driven tax dispute resolution supports faster tribunal processes, reduced litigation, and improved taxpayer services through digital filing and assessments.
The Kolkata Bench of the Income Tax Appellate Tribunal is intended to expedite tax-dispute resolution across 12 states, including seven northeastern states, while advancing impartial, accessible and swift justice. Its administrative role includes improving justice delivery, reducing pendency and pursuing AI-driven digital transformation. The Income Tax Department and the Tribunal seek reduced litigation and improved taxpayer services through technology-driven measures, including faceless assessment and electronic filing.
September 7, 2026
Show AI Summary
Appeals against NIL or Zero GST demand orders are enabled where taxpayers paid liabilities before issuance of the order.
GST Portal validation restricting appeals against demand orders showing NIL or Zero demand has been removed where a liability dispute exists and the taxpayer made payment before issuance of the demand order. Taxpayers may challenge such orders by filing an appeal in Form GST APL-01, and may raise a ticket with the GST Helpdesk if filing difficulties arise.
September 7, 2026
Show AI Summary
Certificate of origin API integration enables exporters to submit applications, receive certificates, verify issuance, and reduce repetitive data entry.
Open API integration for Certificates of Origin enables eligible exporters to connect ERP, accounting and other business software with the Trade Connect e-Platform for electronic application submission. The facility covers preferential and non-preferential certificates, provides authentication, file-submission and certificate-verification APIs, and maintains a transaction ledger for application tracking. Security measures include digital signatures, password hashing, IP whitelisting and time-limited access tokens. Relevant origin criteria, fields and validation rules are automatically applied according to the selected trade agreement or certification scheme.
September 7, 2026
Show AI Summary
Free trade agreements and strategic partnerships were identified as supporting India's trade engagement and economic growth amid geopolitical disruption.
India's international economic engagement through free trade agreements and strategic partnerships was identified as a means of sustaining economic growth amid geopolitical disruption. Economic cooperation was described as extending across defence, technology, energy, investment and trade. Nine free trade agreements were stated to have been concluded by 2026, with further trade arrangements proposed with other countries. Pursuit of free trade agreements was linked to increasing trade and to reported first-quarter GDP growth in the financial year 2026-27.
September 7, 2026
Show AI Summary
Leadership, talent recognition and legacy framed a discussion linking cricketing performance with entrepreneurship and organisational responsibility.
No FEMA or RBI regulatory measure, compliance obligation, legal interpretation, or adjudicatory determination is identified. The subject matter concerns leadership, performance and entrepreneurship, with emphasis on preparation, decision-making under pressure, teamwork, recognising potential and supporting talent. Corporate success is linked with creating opportunities, contributing to society and building a lasting legacy. Zaggle is described as providing enterprise spend management, card-based financial products through banking partnerships and software offerings for corporate customers.
September 7, 2026
Show AI Summary
AI-driven digital markets require competition scrutiny of autonomous pricing, self-preferencing, discriminatory pricing, tying, and market manipulation.
Artificial intelligence may accelerate anti-competitive conduct in digital markets through self-preferencing, discriminatory pricing, tying and market manipulation. Agentic AI may create particular concerns where it monitors competitors' prices and autonomously responds without direct human intervention. Competition law aims to prevent anti-competitive practices, promote competition, protect consumers and preserve freedom of trade, while allowing legitimate growth and innovation. Market dominance is not objectionable in itself; concern arises from abuse of dominance through exclusionary or exploitative practices.
September 7, 2026
Show AI Summary
Healthcare innovation and supply-chain self-reliance are prioritised through trade access, investment, research collaboration, testing infrastructure, and quality standards.
Healthcare-sector development priorities seek to expand medical devices, diagnostics, digital health, research, and pharmaceutical machinery through exports, import substitution, and services growth. Free trade agreements are presented as supporting preferential market access, services opportunities, and mobility. Sectoral growth is linked to startup incubation, intellectual-property capability, international research collaboration, technology transfer, and joint ventures. Healthcare self-reliance requires indigenous equipment, critical components, resilient supply chains, shared testing and certification infrastructure, and uncompromising quality standards.
September 7, 2026
Show AI Summary
Medical value tourism quality standards prioritise verified hospitals, ethical treatment, transparent pricing, and seamless international patient care.
Medical value tourism is proposed to expand through trained caregivers, transparent treatment packages, ethical hospital practices, seamless reimbursement and cashless-payment systems, telemedicine, and verified hospital participation. International patients are intended to receive care through accredited quality systems, supported by interpreters, global outreach, and coordinated healthcare networks. Expansion beyond metropolitan areas must maintain equivalent high-quality care for domestic and foreign patients without discrimination. Certification systems are expected to remain professionally independent and free from unethical influence.
September 7, 2026
Show AI Summary
Foreign exchange market pressures from rising crude oil and weak domestic equities constrained rupee support from foreign inflows.
Foreign exchange market conditions caused the rupee to depreciate against the US dollar despite support from FCNR dollar inflows and a softer dollar. Rising crude oil prices, weak domestic equities and global headwinds constrained gains. The outlook remained dependent on foreign inflows, dollar movements, crude prices, market sentiment and inflation data, with geopolitical tensions capable of increasing pressure on the currency.
September 7, 2026
Show AI Summary
Healthcare supply-chain resilience requires diversified sourcing, global investment, domestic innovation, and stronger medical-device production supported by enabling infrastructure.
Healthcare supply-chain resilience requires diversified sourcing, restoration of domestic capacity in Active Pharmaceutical Ingredients and Key Starting Materials, and continued imports where necessary through multiple suppliers and geographies. Pharmaceutical industry growth should move beyond generics towards research, development, patented products, new molecules, biosimilars and biotechnology. Regulatory convergence should support clinical trials, patenting and new-product introduction. Government support is contemplated for medical value travel, healthcare infrastructure, bulk drug parks, plug-and-play facilities, medical-device component production and scientific validation of Ayush products.
September 7, 2026
Show AI Summary
Foreign exchange market pressures offset rupee support from FCNR inflows amid higher crude oil and dollar demand.
The rupee gained marginally against the US dollar, supported by FCNR-related dollar inflows and robust liquidity. Elevated Brent crude prices, safe-haven dollar demand and geopolitical tensions constrained this support. Higher oil prices may enlarge India's import bill, increase dollar demand and pressure the rupee, although rising foreign-exchange reserves indicated external-sector strength.
September 6, 2026
Show AI Summary
Census data privacy and electoral integrity concerns emerge alongside calls to repeal insolvency law and protect political dissent.
CPI(M) called for repeal of the Insolvency and Bankruptcy Code, alleging that insolvency processes enabled diversion of public resources. It questioned economic growth figures against agricultural weakness, mining contraction, higher input costs, inflation, unemployment and malnutrition. The party also raised Census data privacy concerns over caste-data collection, potential linkage with government databases, and possible implications for citizenship, electoral rolls and future delimitation.
September 6, 2026
Show AI Summary
Food business licensing: Third-party restaurant operators require their own licences and cannot operate under another entity's registration.
Food Business Operator licensing requires the entity holding a food licence or registration to itself conduct the licensed food business at the specified premises. A third-party operator cannot operate under another entity's licence or registration and must obtain its own licence or registration. Regulatory notices concerning such arrangements may also address hygiene lapses and structural violations, followed by consideration of the operators' responses.
September 6, 2026
Show AI Summary
European diesel supply dependence on alternative refiners grows amid constrained exports, weakening transatlantic flows, and restricted shipping routes.
European diesel supply is becoming increasingly dependent on Indian refining capacity as Russian diesel and gasoil exports remain constrained by export restrictions, refinery disruptions and port outages, while US shipments to Europe have weakened. Alternative supply routes offer limited additional clean-product volumes because reduced tanker crossings and lower ship-to-ship transfers offshore Oman constrain flows through the Strait of Hormuz. Low diesel inventories, seasonal demand and planned refinery maintenance increase exposure to supply disruptions.
September 5, 2026
Show AI Summary
Tariff-driven inflation and elevated borrowing costs constrain growth, while durable deficit reduction may require spending restraint and tax increases.
Persistent inflation, elevated interest rates and rising public debt constrain economic growth policy. Tariffs and oil shortages are identified as contributing to inflationary pressures, while lower interest rates could increase money flows and worsen inflation. Tariffs, tax cuts, artificial intelligence productivity gains and anti-fraud measures are advanced as mechanisms to support growth, investment and domestic employment. Fiscal sustainability, however, cannot be achieved through growth alone where social security and healthcare costs exceed revenue growth; deficit reduction may require slower spending, spending reductions and tax increases.

News

Back

All News

Showing Results for :
Reset Filters
No Records Found

News

Showing Results for : Reset Filters
Customs, DGFT & SEZ

Directorate General of Commercial Intelligence and Statistics Revises Base Year of Merchandise Trade Indices to FY 2022–23 to Reflect Current Trade Structure and Global Patterns

February 21, 2026

Contents
Summary
Note

Note

-

Bookmark

Print

Print

Merchandise Trade Indices are compiled and published by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), Ministry of Commerce & Industry, to measure changes in the unit values (prices) of India’s exports and imports over time. 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 most recent revision updates the base year to FY 2022–23 (2022–23 = 100), replacing the earlier base of FY 2012–13, thereby ensuring that the indices accurately represent the current structure of India’s merchandise trade.

Revision of Base Year of India’s Merchandise Trade Indices to FY 2022–23

The Directorate General of Commercial Intelligence and Statistics (DGCI&S), Ministry of Commerce & Industry, has revised the base year of India’s Merchandise Trade Indices from FY 2012–13 to FY 2022–23 (2022–23 = 100), 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 revision has been undertaken on the recommendations of a committee constituted by DGCI&S under the Chairmanship of Prof. Nachiketa Chattopadhyay, Professor, Indian Statistical Institute, Kolkata. The Committee examined the existing methodology, data coverage, weighting structure, and compilation practices, and recommended suitable refinements in line with international best practices.

Key Features of the Revised Series (Base: FY 2022–23)

  1. Updated Base Year:
    The new base year FY 2022–23 makes the Indices reflect the current structure of India’s external trade more accurately.
  2. Revised Commodity Basket:
    The coverage and classification of commodities have been reviewed at the Principal Commodity level to better capture emerging and declining trade items.
  3. Revised Weighting Structure:
    Weights have been updated based on trade values of the new base year to reflect the latest value shares in exports and imports.
  4. Improved Methodology:
    Methodological refinements have been introduced in:
    1. Selection of common commodity basket for base year selection (procedure of selection for common commodity basket explained in detail report of the committee).
    2. Treatment of missing unit values (Imputation of missing unit values in base year selection have been explained in detail in the committee report).
  5. Indices Compiled:
    The revised series includes:
    1. Monthly, Quarterly and Annual Indices (Export Unit Value Index,Import Unit Value Index).
    2. Principal Commodity (PC) Classification wise Trade Indices (Export/Import).
    3. Standard International Trade Classification-wise (SITC) Trade Indices.
    4. Broad economic categories-wise (BEC) Trade Indices.
    5. Bilateral and Region-wise Trade Indices of Top 20 Export and Import partner nations of India.
    6. Terms of Trade (Gross terms of trade, Net terms of trade and Income terms of trade).

Rationale for Revision

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 (FY 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.

Use of the Revised Series

Merchandise Trade Indices compiled by the Directorate General of Commercial Intelligence and Statistics (DGCI&S) are extensively used by key government institutions for economic analysis and policy formulation. The National Accounts Division (NAD) 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. The Reserve Bank of India (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 trendson and economic research.

Availability of Data

The revised Merchandise Trade Indices (Base: FY 2022–23) will be released on the official website of DGCI&S. Detailed methodological documentation is available in the Report of the Committee on Revision of Base Year for Merchandise Trade Indices.

Comparison of the new revised Indices (Base Year: 2022-23) with the already released Indices (Base Year : 2012-13) for 2022-23 and 2023-24 is given below.

#BY means Base Year.

 

#BY means Base Year.

Table: Unit Value Index (UVI) and Quantity Index (QI) during FY 2025-26(Apr-Nov) using FY 2022-23 as base year

 

Month

Apr_25

May_25

Jun_25

1st Qtr 25-26

Jul_25

Aug_25

Sep_25

2nd Qtr 25-26

Oct_25

Nov_25

Unit Value Index

Export

105.31

99.73

96.31

100.33

99.31

100.55

104.08

101.23

103.78

105.32

Import

92.33

97.97

91.74

94.08

96.34

100.81

108.69

101.93

110.17

106.59

Quantity Index

Export

107.85

104.76

93.88

101.91

103.41

102.64

111.04

105.57

116.19

113.06

Import

138.16

126.61

112.58

125.17

122.47

124.06

126.45

124.32

137.04

121.75

Qtr  means Quarter.

Meaning and interpretation of the Indices

The Unit Value Indices and the Quantity Indices may be interpreted along the following lines.

The Unit Value Index answers the question: What is the growth in the average Unit Value of the items1 traded in the current month with respect to the same month in the Base Year?

So, an Unit Value Index of, say, 120 means that if the items that have been traded in the current month had been traded in the same month of the base year, and if the average price (or unit value) of those items had been Rs.100 in that month of the base year, then the average price (or unit value) of these items in the current month is Rs.120. Or that, there is a 20% increase in the average Unit Value, with respect to the Base Year, of the items that have been traded in the Current Month.

For example, let us suppose 30 items, 10 items each from 3 different Principal Commodities, have been traded in the current month. If these 30 items had been traded in the corresponding month of the base year at an average price of Rs.100, then the average price of these items in the current year is Rs.120.

It is to be noted that there are two successive steps of averaging done here. The first averaging is done over all the items (or ITCHS) of a PC group to arrive at the Index of that PC group. And the second averaging is done over all the PC groups to arrive at the Index at the Grand Total level for all commodities (which is the overall Index for India for a month). In both the stages, a weighted average is taken where the weights are proportional to the importance of the items and the PC groups respectively, and the Laspeyres Formula is used for averaging.

Quantity Indices, say, 200 means that if in the base year on an average 100 units were traded in India in the base year, then in the current year on an average 200 units were traded. However, it must be remembered that averaging quantities are different from averaging prices, since quantities in different units cannot be added directly.

So, the Quantity Indices are calculated by dividing the Value Indices by the Unit Value Indices. For example, if there is an increase in the Value of Export from Rs. 10,000 to Rs. 24,000, then the Value Index is 24000/10000 × 100 = 240. If the Unit Value Index is 120, then the Quantity Index comes to 240/120 × 100 = 200. So, loosely it can be said that, if the value of export has increased 2.4 times and the price of the commodities has increased 1.2 times, then the quantity must have doubled.

However, it may be noted that a very high or low Quantity Index may indicate the presence of Base Effect.

The Interpretation of the Bilateral and Regional Indices can be seen as an extension of the above.

A Unit Value Index of 120 with respect to a country, say Bangladesh, means that if all the items that have been traded with Bangladesh in the current month had been traded in the same month of the base year with the same country, and if the average price (or unit value) of those items had been Rs.100 in that month of the base year, then the average price (or unit value) of these items in the current month is Rs.120.

Similarly, a Quantity Index of 200 with respect to a country, say Bangladesh, means that if in the base year on an average 100 units were traded in India in the base year, then in the current year on an average 200 units were traded.

Comparability of the Indices across time

It is to be noted that the weights in the Index Number formula are fixed across time and there are twelve sets of weights for the twelve months. Hence, comparability of Indices is meaningful only when Indices of same month are compared across years. Different months may attach different weights to the same item, and hence comparing indices of two different months becomes vague and may have little applicability.

Further, the weights of the items that are not present in the trade basket of the current month are distributed to all the items that have been traded in the current month. This distribution is done in proportion to the weights of those items.

For example, let us suppose there are only 3 commodities for trade, say A, B and C. In month May of the Base year, let us suppose that the trade value of A was Rs. 50, B was Rs. 100 and C was Rs. 50. Then the weights assigned to A, B and C in the month of May of the following years would be in the ratio 50 :100 :50. However, in case, C is not traded in the current month, then the weight of C would be distributed proportionately among A and B, again in the ratio 1:2 (since in May the weights of A and B are in the ratio of 50 : 100, i.e., 1 : 2). So, in the current month the weights of A and B would be 3313  and 6623 .

As a result, the weights in any two given months are dependent on exactly the number of items (ITCHS codes) traded in those months. If the items traded are widely different, inference drawn from the comparison of the Indices may be done accordingly. On the other hand, more the similarity in the number of items traded more is the comparability of the two indices.

Net Terms of Trade:

Net Terms of Trade also called commodity Terms of Trade is defined as a ratio of export prices to import prices.

Let say 2022-23 be the base year and 2023-24 be the final year. We express both export and import prices in 2022-23 as 100. Now, suppose that at the end of 2023-24, it is found that the index of export prices decreased to 90 and index of import prices roses to 150. Then the Net Terms of Trade has changed to 90100150100=35 . Then terms of trade as index=35*100=60 . It implies that terms of trade of the country have decreased by about 40% in 2023-24 as compared with 2022-23. It thus shows a deterioration or a worsening of the terms of trade of the country.

If the index of export prices has risen to 150 and that of import prices had risen to 120, then the net terms of trade would have changed to 150120*100=125 . This implies an improvement in the net terms of trade of the country by 25% in 2023-24 over 2022-23.

Gross Terms of Trade:

Gross Terms of Trade is the ratio of physicalquantity of import to physical quantity of export.

Let say 2022-23 be the base year. In that year, the quantities export and import are denoted by 100. Now, suppose that in the year 2023-24, the index of quantity of import was 150 and that of quantity of export was 120. Then the gross terms of trade is given by 150100120100=54,  in terms of percentage =54*100=125 . This implies that there was an improvement of gross terms of trade by 25% in 2023-24 compared to 2022-23.

Income Terms of Trade: Income Terms of Trade is defined as- Net Terms of Trade multiplied by quantity of export.

Topics

Acts Income Tax