In March 2025, Geneva (Switzerland)-based United Nations Conference on Trade and Development (UNCTAD) released its latest Global Trade Update: March 2025 report. As per the report, developing countries, specifically China and India saw better than average trade expansion in the 4th Quarter (Q4) of 2024. In contrast to it, many developed countries experienced contractions during the same period.
- However, the report cautioned about potential economic slowdown globally in the upcoming quarters.
- The report highlighted that trends like increasing deficits in countries like: the United States of America (USA), European Union (EU), India, among others, amid changing energy tariffs, restrictions or investment shifts could possibly increase the economic uncertainty.
Global Scenario:
i.The report showed that global trade saw significant expansion to USD 33 trillion in 2024, an increase of 3.7% (USD 1.2 trillion) from 2023, driven by developing economies and strong services trade, except for regions like: Europe and Central Asia.
ii.The report further showed that global growth expansion in 2024 was mainly led by services sectors, which saw the Year-on-Year (Y-o-Y) growth of 9% and contributed USD 700 billion, which is nearly 60% of the total growth.
- While, trade in goods has increased at the rate of 2%, contributing USD 500 billion.
- However, the report cited that growth in both sectors slowed in the 2nd half of 2024 i.e. services and goods sector saw the growth of just 0.1% and 0.5%, respectively in the Q4 of 2024.
iii.The report revealed that developing economies outpaced developed countries, with imports and exports increasing to 4% for the year and 2% in Q4 of 2024, attributed mainly by East and South Asia region.
- Also, South-South trade saw the Y-O-Y growth of 5% and 4% in the previous quarter of 2024.
- Meanwhile, developed countries like: Russia, South Africa and Brazil, saw sluggish growth in the trade sector for the year and declined by 2% in Q4 of 2024.
India-Specific:
i.The report showed that India registered an 8% quarterly imports growth in goods trade in Q4 2024 compared to last quarter and Y-O-Y imports growth of 6%.
ii.As per the report, India’s quarterly exports growth in goods stood at 7% and annual exports growth was 2% in Q4 2024.
iii.The report revealed that Indian services imports saw a quarterly growth of 7% and an annual growth of 10% in Q4 2024.
- While, India registered the quarterly services exports growth in services at 3% and annual exports growth in services was at 10%.
Key Challenges:
i.As per the report, agricultural exports from developing countries face high import duties averaging almost 20% under the Most Favored Nation (MFN) system.
- Also, textiles and apparel face some of the highest tariff rates i.e. import duties average nearly to 6%.
ii.The report has outlined that increasing geo-economic tensions, protectionist policies and trade disputes indicate likely disruptions ahead.
About United Nations Conference on Trade and Development (UNCTAD):
Secretary-General- Rebeca Grynspan(Costa Rica)
Headquarters- Geneva, Switzerland
Established- 1964
