India Outperforms Global Trade Average As Services Drive Exports: UNCTAD

Developed economies' trade stagnated, with imports and exports flat for the year and down two per cent in the last quarter. Merchandise trade imbalances widened in 2024, as they returned to 2022 levels

India outperformed global trade averages with services exports driving growth as total world trade hit a record $33 trillion in 2024, expanding 3.7 per cent, according to the latest Global Trade Update by UN Trade and Development (UNCTAD). Simultaneously, the report also warns that while global trade remains strong with a $1.2 trillion year-on-year increase in 2024, uncertainty looms large in 2025.

Services drove growth, rising nine per cent for the year and adding $700 billion – nearly 60 per cent of the total growth. Trade in goods grew two per cent, contributing $500 billion. Most regions saw positive growth, except for Europe and Central Asia. Growth varied by industry - agri-food, communication technology and transport saw gains, while energy, apparel and extractives slowed due to weaker demand and policy shifts, the UNCTAD report said.

The momentum, though, slowed in the second half of the year. In the fourth quarter, trade in goods grew by less than 0.5 per cent, and services edged up just one per cent. Trade remained stable early 2025, but mounting geo-economic tensions, protectionist policies and trade disputes signal likely disruptions ahead, the report said.

Falling shipping indexes signal weaker demand for manufactured goods, inputs and commodities as businesses adjust to increasing uncertainty. This year’s challenge is in preventing global fragmentation – where nations form isolated trade blocs – while managing policy shifts without undermining long-term growth, the report pointed out.

Trade inflation neared zero as prices for traded goods stabilised in the last quarter of 2024. The lingering effects of high post-pandemic inflation appear to have run their course, the report observed. In 2024, developing economies outpaced developed nations, with imports and exports rising four per cent for the year and two per cent in the fourth quarter, driven mainly by East and South Asia.