GTRI predicts India’s export risks will intensify as global trade headwinds, including rising tariffs, curb demand for goods.
According to GTRI, policy shocks, rising domestic costs, and the slowdown in international trade could make India’s export sector more vulnerable. The think tank’s assessment is based on the World Trade Organization’s most recent Goods Trade Barometer, which reveals a sharp slowdown in merchandise trade after a tariff-fueled spike earlier this year.
According to it, the WTO analysis shows that a significant contributing reason to the durability of international trade into early 2025 was the strong demand for AI-related products. But when advance purchases fall and protectionist measures resurface, the rate of growth is declining. While agricultural raw materials have already fallen below trend, the bulk of crucial indicators, such as electronics, air freight, container transport, and cars, are still in growth territory but are beginning to slow down.
The WTO’s has insinuated that the global volumes may drop in 2026 due to growing tariffs and trade policy concerns, even while trade growth is still happening for the time being.
This general cooling is reflected in India’s export performance in October, but there are more significant negative pressures. Merchandise exports decreased 11.8 percent year over year due to a decrease in shipments in 15 of India’s 20 major states. The United States saw an 8.6 percent loss in exports, while the United Arab Emirates, the United Kingdom, Italy, and the Netherlands saw even greater declines. A steep fall in exports to Australia and Singapore hints to an abrupt downturn in Asia-Pacific value chains.
Only a few countries, like China and Spain, had an increase in exports, and this was primarily due to commodities and energy-related products rather than strong manufacturing activity.
According to GTRI, India’s vulnerability to diminishing global demand is starting to become apparent due to the combined effects of global trade interruptions and growing local cost burdens, echoing the larger global trend of slower trade growth rather than a precipitous decline.
SOURCE – MARITIME GATEWAY
