Relevance: GS-III (Indian Economy – Trade, Sustainable Development)

What is the Sustainable Trade Index (STI)?

A joint annual ranking by the Hinrich Foundation and IMD World Competitiveness Center that measures how 30 economies use trade in a way that balances economic growth, social inclusion, and environmental stewardship—grouped into three pillars: economic, societal, environmental. 

2025 headline
The latest edition finds United Kingdom, New Zealand, and Australia leading global sustainable-trade practices amid a wider trend of economies seeking greater self-sufficiency. 

How the pillars are defined (in plain words)

• Economic: trade infrastructure, ease and costs of trading, diversification, tech & innovation—i.e., the capacity to grow through trade.
  
• Societal: education, health, labour standards, inequality, political stability, and action against forced/child labour—i.e., social foundations that keep public support for trade.
  
• Environmental: air & water quality, carbon intensity, environmental standards, and natural-resource dependence—i.e., whether trade is nature-positive.
  

India’s placement & signals

• In STI-2024, India ranked 23rd (overall score ~24/100)—stronger on the economic pillar (~62.3), but weaker on societal (~13.3) and moderate on environmental (~43.1).
  
• Interpreting this: India’s trade engine and innovation base are improving, but human capital, labour standards, inclusion, and air/water outcomes still drag the overall sustainability of trade.
  

Significance
The STI offers a neat, comparative lens on the trade–growth–inequality–environment balance—linking Foreign Trade Policy, logistics, labour reforms, skill missions, energy transition, and net-zero debates.

What India can do

• De-risk supply chains: deepen value-added manufacturing and services exports; cut logistics costs via Gati Shakti & PM Gati Shakti National Master Plan.
  
• Boost societal pillar: raise female LFPR, enforce labour standards in supply chains, expand skilling/apprenticeships, and strengthen social protection for informal workers.
  
• Green the export basket: tighter air/water norms, faster renewables & energy efficiency in clusters, carbon-measurement for exporters, and circular-economy rules to reduce resource intensity.
  
• Data & cooperation: align with global due-diligence regimes and report Scope-1/2/3 emissions for major export sectors to keep market access.
  

Exam hook

Key takeaways

• STI tracks balanced trade performance; UK–NZ–Australia lead in 2025.
  
• India (2024) sits mid-table: strong economy pillar, weak societal, middling environment—policy must lift the “people & planet” legs to match the “profits” leg.
  

UPSC Mains (10 marks)
“Sustainable trade demands more than export growth. Using the Hinrich–IMD STI pillars, assess India’s strengths and gaps. Outline a three-year plan to improve the societal and environmental pillars without slowing export competitiveness.”

UPSC Prelims (MCQ)
Q. With reference to the Hinrich–IMD Sustainable Trade Index, which of the following is/are correct?

1. It ranks economies on economic, societal, and environmental pillars.
   
2. The 2025 edition ranks the United Kingdom, New Zealand and Australia as the top three.
   
3. India’s 2024 profile shows higher scores on the economic pillar than the societal pillar.
   Answer: 1, 2 and 3.
   

One-line wrap: Trade that lifts incomes, people, and the planet together is the new scoreboard—India’s task is to pair its strong trade engine with stronger social and green foundations.