Synopsis
India's remarkable performance in global trade, driven by services exports, led to a record $33 trillion in total world trade for 2024, according to UNCTAD. The report highlights both growth and potential uncertainties in the trade landscape moving into 2025.Key Takeaways
- India outperformed global trade averages in 2024.
- Services exports contributed significantly to trade growth.
- Global trade hit a record $33 trillion.
- Geoeconomic tensions pose risks for future trade.
- Trade inflation stabilized towards the end of 2024.
New Delhi, March 15 (NationPress) India has surpassed global trade averages as its services exports fueled substantial growth, with total world trade achieving a historic $33 trillion in 2024, marking a 3.7 percent increase, as reported in the latest Global Trade Update by the UN Conference on Trade and Development (UNCTAD).
Nonetheless, the report cautions that while global trade continues to be robust with a $1.2 trillion increase year-on-year in 2024, uncertainties may arise in 2025.
Services were the primary growth catalyst, increasing by 9 percent for the year and contributing $700 billion – nearly 60 percent of total growth. In contrast, the trade of goods experienced a 2 percent growth, adding $500 billion, according to the findings.
Most regions exhibited positive growth, with the exception of Europe and Central Asia. Growth rates varied by sector; agri-food, communication technology, and transport sectors experienced gains, while energy, apparel, and extractive industries slowed down due to diminished demand and policy changes, the UNCTAD report indicated.
However, momentum decelerated in the latter half of the year. In the fourth quarter, the trade of goods increased by less than 0.5 percent, and services saw a modest rise of merely 1 percent.
Trade remained stable at the beginning of 2025, but escalating geoeconomic tensions, protectionist measures, and trade conflicts suggest potential disruptions on the horizon, the report advised.
Declining shipping indexes indicate a decrease in demand for manufactured goods, inputs, and commodities as businesses adapt to rising uncertainties.
The challenge for 2025 is to avert global fragmentation—where nations form isolated trade blocs—while managing policy transitions without jeopardizing long-term growth, the report emphasized.
Trade inflation approached zero as prices for traded goods stabilized in the final quarter of 2024. The lingering impacts of high post-pandemic inflation appear to have subsided, the report noted.
In 2024, developing economies outperformed developed nations, with imports and exports rising by 4 percent for the year and 2 percent in the fourth quarter, largely driven by East and South Asia. South-South trade grew by 5 percent annually and 4 percent in the last quarter.
China and India led in surpassing global trade averages. Conversely, trade in the Russian Federation, South Africa, and Brazil remained subdued for the majority of the year, with some improvement noted in the fourth quarter, according to the report.
Meanwhile, trade in developed economies stagnated, with imports and exports remaining unchanged for the year and declining by 2 percent in the last quarter.
Merchandise trade imbalances widened in 2024, reverting to levels seen in 2022.
The trade deficit of the US with China reached -$355 billion, widening by $14 billion in the fourth quarter, while its deficit with the European Union (EU) increased by $12 billion to -$241 billion.
Meanwhile, China's robust exports elevated its trade surplus to the highest level since 2022. The EU reversed earlier deficits, achieving a trade surplus for the year, bolstered by elevated energy prices, the report concluded.
