The World Trade Organization (WTO) has sharply cut its global trade growth projections for 2025, warning that escalating tariffs—led primarily by the U.S.—could shrink merchandise trade volumes by 0.2%, nearly three percentage points lower than earlier estimates. The revised outlook marks a stark contrast to the optimistic forecasts at the start of the year, as geopolitical tensions and protectionist policies continue to disrupt supply chains.

Global Trade Takes a Hit
The WTO’s latest report highlights how the U.S.-led tariff war, particularly targeting china and other major economies, has dampened trade flows. While a modest 2.5% rebound is expected in 2026, the short-term outlook remains grim. Rising trade barriers, coupled with slowing demand in key Western markets, have forced developing nations to recalibrate their export strategies.

India’s Mixed Fortunes
For india, the situation presents both challenges and opportunities. On one hand, weaker global demand could hurt sectors like textiles, electronics, and pharmaceuticals, which rely heavily on exports. The WTO’s warning aligns with recent data showing India’s merchandise exports stagnating at $420–450 billion over the past two years.

However, economists argue that india could turn the crisis into an advantage. With multinational firms looking to diversify supply chains away from china, India’s aggressive push for manufacturing self-reliance (Atmanirbhar Bharat) and trade pacts with the EU, UK, and African nations may help offset losses.

Will india Bloom Again?
Experts suggest that India’s growth will depend on three key factors:

Domestic Manufacturing Boost – The Production-Linked Incentive (PLI) schemes in electronics, semiconductors, and renewable energy could attract global investors.

Services & wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital Trade – India’s IT and wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital services remain resilient, with software exports expected to grow 8–10% despite global headwinds.

Strategic Trade Partnerships – New deals with emerging markets in Africa and Latin America could reduce dependency on traditional Western buyers.

Commerce minister Piyush Goyal recently stated that india is “well-positioned to navigate global turbulence” by focusing on high-value exports and reducing import dependence. However, critics warn that without faster infrastructure upgrades and easier trade regulations, india may miss this opportunity.

The Road Ahead
While the WTO’s gloomy forecast spells trouble for world trade, India’s ability to adapt will determine whether it emerges stronger or gets caught in the crossfire of a fragmented global economy. For now, the government remains cautiously optimistic—betting on domestic reforms to keep the economy blooming even as trade winds turn stormy.
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Sindujaa D N

17/04/2025 11:40 AM