Meanwhile, India’s merchandise trade deficit in December was largely flat at $23.76 billion compared with $23.89 billion in the previous month, according to a Reuters calculation.
India’s imports saw a dip of around 3.5% on an annual basis to $58.24 billion as against $60.33 billion in the same month last year, news agency PTI quoted government data as saying. India’s merchandise imports stood at $55.88 billion in the month before.
India’s exports may have touched an all-time high of USD 422 billion in 2021-22 but recession in key western markets and geo-political crisis due to the Russia-Ukraine war are expected to impact the growth of the country’s outbound shipments in 2023.
All the global trade promoting factors like political stability, movement of goods, adequate availability of containers and shipping lines, demand, stable currency and smooth banking systems are in disarray.
Adding to the woes, COVID cases have again started rising in countries like China, Japan, South Korea and the US.
Before the COVID-hit global economies could come out of the woods, the outbreak of the Russia-Ukraine war in February severely disrupted the supply chains worldwide and hardened the global commodities prices. The war has also impacted the movement of goods through the important black sea route.Taking note of worsening geopolitical situation, the World Trade Organization (WTO) has projected that the global trade would grow by only one per cent in 2023.
The Geneva-based multilateral trade body has said the world trade is expected to lose momentum in the second half of 2022 and remain subdued in 2023, as multiple shocks weigh on the global economy.
“WTO economists now predict global merchandise trade volumes will grow by 3.5 per cent in 2022 — slightly better than the 3 per cent forecast in April. For 2023, however, they foresee a 1 per cent increase — down sharply from the previous estimate of 3.4 per cent,” it has said.
According to experts, amid these developments it would be difficult for India to insulate itself from the dark clouds.