NEW DELHI: India has seen strong goods and services trade momentum in the Dec quarter, a report by UN body Unctad has said but cautioned that global trade could be hit by the policy shifts in the US and trade and geopolitical tensions.
Besides, it has pointed to high duties faced by developing countries, limiting market access for their goods. The agency’s latest Global Trade Update said that exports from South Asia face among the highest tariffs, averaging around 4%, while imports to the region and Africa see the highest average levy of around 8%.
It, however, pointed out that despite having lower tariffs in general, developed countries maintain “tariff peaks” with duties as high as over 100% for several farm goods. In general, South Asia topped the list on this count too.
The report said developing countries maintained higher duties on imports to support nascent industries, and also have more elbow room during trade negotiations. For some countries, it was also a revenue instrument, with taxes on international trade generating 10-30% of govt revenue.
Unctad said when it came to goods trade, India and China saw strong momentum in the Dec quarter, reporting growths of 7% and 5%, respectively. “Developing nations, particularly China and India, saw better than average trade expansion, while many developed nations experienced trade contractions,” it said.
India’s export of goods and services grew 6.3% in 2024 (calendar year) as against global annual trade growth of 3.7%. India’s exports of goods and services rose to $ 817.4 billion in 2024, compared with $769 billion in 2023.
South Africa saw a 13% jump in services exports, while India grew 3% during the Dec quarter.
It also highlighted India’s high trade deficit, especially with China and Russia, which were among the highest for bilateral trade. During 2024, the US had the highest trade deficit with China ($355 billion), followed by that with the European Union ($241 billion). India’s trade deficit of $103 billion with China was seventh among bilateral trading partners, followed by the $65 billion with Russia at number 12.
In recent years, India’s exports to China have declined, widening the trade deficit, while the gap with Russia has increased on account of large quantities of crude petroleum being shipped into the country as oil companies seek a bargain and export finished products to other parts of the world in the wake of sanctions against Moscow.
