According to a recent Commonwealth Trade Review 2021 on ‘Energising Commonwealth Trade in a Digital World: Paths to Recovery Post-COVID‘ released by the Commonwealth Association, due to COVID-19 commonwealth countries lost trade worth USD 345 billion worth of trade in 2020, including USD 60 billion in intra-Commonwealth trade.
- Among the developing nations, only India recorded higher overall Foreign Direct Investment (FDI) inflows in 2020. FDI inflows increased by more than USD 13 billion in 2020, a 29.5% increase over the average annual inflows for 2017-19.
- Globally, COVID-19 has impacted all Commonwealth members’ economies and led to USD 1.15 trillion in past GDP in just one year.
- The commonwealth review provides analysis of the impact of the pandemic on trade and investment flows of Commonwealth member countries.
Regarding India
Due to COVID-19, India’s overall merchandise exports and imports are estimated to have declined by 11.4% and 11.9% respectively between March and November 2020.
- India’s monthly services exports have recovered due to exports of ICT (Information & Communication Technology)-related services.
- The sectors which contributed to growth in FDI inflows are digital sectors, greenfield investment, and Merger and Acquisition (M&A) deals in energy and infrastructure.
ii.According to the analysis, in 2019, India was the 2nd largest global exporter of ICT services (after Ireland).
- Among the Commonwealth countries, India was the largest ICT exporter with service exports totaling USD 70 billion.
- The value of India’s ICT services exports to Commonwealth countries has increased from USD 9 billion in 2010 to USD 17 billion in 2019.
iii.Preliminary estimates put the growth rate of India’s IT sector for 2019-20 at 10%.
Commonwealth Countries
Compared to pre-pandemic growth trends, commonwealth economies contracted by ~ 10%.
Exports
- The countries experienced decline in overall FDI inflows in 2020, with a loss of USD 153 billion to the Commonwealth.
- Developing Commonwealth countries faced higher losses, exports have contracted by ~ 10.1%.
- Asian economies suffered the largest decline in exports (at USD 146 billion), followed by Africa (USD 20 billion), Caribbean (USD 4.2 billion) and Pacific members (USD 1.3 billion). The exports of Caribbean Small Island Developing States (SIDS) declined by 20%.
- The intra-Commonwealth exports are expected to recover and surpass USD 700 billion by 2022.
FDI
i.The FDI inflows are expected to decline by 18% in 2021, and a further 7% in 2022.
- Due to this, the total value of FDI inflows to the Commonwealth is expected to decline to USD 136 billion in 2022, or a loss of around USD 220 billion compared with 2019.
ii.Only 8 commonwealth developing countries recorded higher overall FDI inflows in 2020 compared with 2017-19 average. They are Gambia, Malawi, Sierra Leone, India (only country in Asia), Belize, Guyana, Trinidad and Tobago, and Papua New Guinea.
Recent Related News:
May 25, 2021, As per the data released by the Ministry of Commerce & Industry, India has attracted the highest ever total FDI inflow of US$81.72 billion during FY21, which is 10 percent more than FY20.
About The Commonwealth
Secretary General – Patricia Janet Scotland
Headquarters – London, UK
Members – 54
