- India’s trade grew steadily in late 2024, outpacing many developed nations.
- Services exports rose by 10% annually, with IT and business services leading the way.
- Global trade faces risks in 2025 due to weak shipping demand and geopolitical tensions.
How Is India Maintaining Trade Growth Amid Global Challenges?
A new United Nations Conference on Trade and Development (UNCTAD) report highlights that while global trade grew by $1.2 trillion in 2024, many developed nations struggled. In contrast, India’s trade momentum remained strong, with both goods and services showing positive growth in the last quarter of the year.
India’s goods imports increased by 8% quarterly and 6% annually, while exports rose by 7% quarterly and 2% annually. The services sector, particularly IT and business services, played a key role in India’s success. Services imports grew by 7% quarterly and 10% annually, while services exports increased by 3% quarterly and 10% annually.
Will India’s Trade Growth Continue in 2025?
Despite India’s positive performance, the report warns of potential challenges ahead. A decline in global shipping demand is a major concern. The Shanghai Containerized Freight Index, which tracks shipping costs, has dropped, signaling a slowdown in global trade. Similarly, the Baltic Dry Index, which measures shipping rates for raw materials like coal and iron ore, remains lower than in 2024.
Additionally, geopolitical tensions and new trade policies could disrupt global trade patterns. The U.S. trade deficit is widening, and some countries are increasing trade surpluses, adding to uncertainties. Protectionist policies, including higher tariffs on certain products, may also impact trade flows.
What’s Next for India’s Trade?
Despite these concerns, there are positive factors that could support India’s trade growth. The expected easing of global inflation and India’s stable economic performance may help the country maintain momentum. The report emphasizes that balanced policy decisions and international cooperation will be crucial in ensuring trade stability in the coming months.
While 2025 may bring challenges, India’s strong trade fundamentals and thriving services sector position it well to navigate global uncertainties.
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