India's trade industry showed impressive growth in the last quarter of 2024, according to the latest data from the United Nations Conference on Trade and Development (UNCTAD).
The report points out that while international trade experienced vigorous growth during the year, some of the developed economies faced slowdowns in trade. But India was notable for having performance above the average, with both imports and exports growing.
The report says that world trade increased by almost $1.2 trillion in 2024, taking the overall value to $33 trillion. This was mainly driven by a 9 percent increase in services trade and a 2 percent rise in goods trade.
India's Trade Continues Strong Momentum
India's trade performance continued to be strong during the fourth quarter of 2024, with merchandise and services trade both seeing encouraging trends.
The nation posted an 8 percent quarterly gain in goods imports over the preceding quarter, while yearly imports went up by 6 percent. Also, goods exports grew by 7 percent quarter-on-quarter, with a 2 percent rise over the year.
Services trade remained a growth driver for India. Services imports in the fourth quarter of 2024 increased by 7 percent from the third quarter, and annual growth was 10 percent. Services exports also grew, increasing 3 percent from the previous quarter and 10 percent year-on-year, driven by India's prowess in IT and business services.
Potential Trade Challenges in 2025
Despite India’s strong performance, the report cautions that global trade could face hurdles in the coming months. Early 2025 has already shown signs of slowing demand for container shipping, indicating weaker trade activity.
A fall in the Shanghai Containerized Freight Index, which monitors shipping prices, indicates a lower demand for products globally. The Baltic Dry Index, which monitors shipping prices for major raw materials such as coal and iron ore, is also below 2024 levels.
Trade imbalances are also deepening, as the U.S. trade deficit expands while there are increasing surpluses reported by some nations. Geopolitical tensions and changing trade policies may further make global trade trends more complex in 2025, as emerging protectionist actions, such as tariffs, can upset international trade.
Outlook for the Future
In spite of these apprehensions, the report highlights some encouraging trends. The projected easing of worldwide inflation, along with India's strong economic growth, can support trade momentum.
Analysts say that preserving trade stability will involve judiciously balanced policy actions and enhanced international cooperation. Keeping trade flowing smoothly will be a function of how countries deal with changing economic and geopolitical challenges in the coming months.
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