Abstract

This paper investigates India’s Net Barter Terms of Trade (NTT) with Japan from 2009–10 to
2024–25, focusing on fluctuations in trade competitiveness and their implications for bilateral
relations. Using secondary data from the Reserve Bank of India, UN Comtrade, WITS, and
World Bank, the study calculates NTT through Unit Value Indices derived with Paasche’s
Formula, emphasizing the top ten traded commodities covering nearly 90 percent of flows.
Findings reveal that India enjoyed highly favorable NTT during the early 2010s, particularly
in 2011–12 and 2012–13, but experienced a sharp deterioration during the COVID-19 years
(2019–20 and 2020–21), as rising import costs contrasted with stagnant export prices. While
recovery is visible after 2021, India’s NTT has not returned to earlier peaks, underscoring
structural dependence on high-value Japanese imports and volatility in exports. The study
highlights the importance of diversifying exports, strengthening technology-intensive sectors,
and leveraging CEPA to achieve sustainable trade competitiveness with Japan.