The Hamilton Index, named after the first US Treasury Secretary Alexander Hamilton, draws inspiration from his 1791 argument that strategic state support for domestic industry was essential for national strength. The index was developed in 2022 by the ITIF to track competitiveness in 10 advanced industries, including aerospace, pharmaceuticals, semiconductors, machinery and information technology. Its latest edition highlights the extraordinary rise of China, which now accounts for almost a quarter of global output in these advanced industries and leads in seven of the 10 sectors covered by the index.
The report is not merely a ranking exercise. Its broader message is that industrial leadership increasingly determines economic and geopolitical influence. Advanced manufacturing today creates innovation ecosystems, supply chain power and export resilience. Countries that fail to build such capabilities risk being locked into lower-value segments of global trade. India remains some distance from the technological frontier, though it has begun constructing important elements of an industrial strategy through production-linked incentive (PLI) schemes across electronics, pharmaceuticals, solar modules and semiconductors, alongside infrastructure expansion. These initiatives recognise that industrial capability does not emerge through market forces alone.
But building factories is only part of the challenge. UNCTAD’s latest report highlights another obstacle: the high costs of invisible trade barriers. Even though tariff rates increased globally in 2025, UNCTAD finds that NTMs now impose greater trade costs than tariffs in 88 per cent of countries. These include technical regulations, testing requirements, certification standards, health measures and procedural obligations. Developing countries struggle with increasingly complex regulatory requirements, because compliance infrastructure is expensive and often unavailable domestically. UNCTAD estimates that least developed countries lose 10 per cent of potential exports because they cannot satisfy NTM requirements.
This has direct implications for India. Merchandise export growth has been sluggish for several years. The manufacturing sector continues to face competitiveness pressures. Indian exporters routinely confront requirements linked to sustainability, carbon footprints, ESG reporting, product traceability, technical standards and supply-chain disclosures. Recognising this problem, the DGFT had invited industry inputs on non-tariff barriers faced by Indian exporters. However, little is publicly known regarding the industry response or whether this exercise translated into any systematic policy intervention. Besides, India itself increasingly relies on NTMs for policy and regulatory objectives, often with implications for compliance costs faced by downstream industries.
UNCTAD offers an important insight: improving transparency alone could reduce NTM-related trade costs by nearly 19 per cent, while regulatory convergence could reduce such costs by 15-30 per cent. Policymakers should take note and begin with a consolidated digital repository of all import-export -related NTMs, alongside a single national enquiry point capable of providing authoritative guidance. The Hamilton Index and the UNCTAD report converge on a common message. In the coming years, trade competitiveness will depend less on tariff schedules and more on technological sophistication and regulatory agility. India should, therefore, focus on building technological capability and an efficient compliance capability.
 "Real challenge beyond tariffs: Technology and compliance capability")