In merchandise trade, where exports are concerned, India ranked 17th globally, with a 1.8 per cent share in world trade, amounting to USD 432 billion, a 5 per cent decrease from 2022.
India’s merchandise export value in calender year 2023 decreased by 5 per cent over CY 2022, mirroring global trends even as overall export growth for the year recorded a positive trend, pushed by a significant 9.9 per cent increase in services exports, again in sync with global trends, according to the World Trade Organisation’s Global Trade Outlook and Statistics report. The report has projected that the world merchandise trade volume will grow by 2.6 per cent in 2024 and the growth will continue at 3.3 per cent in 2025.
In merchandise trade, where exports are concerned, India ranked 17th globally, with a 1.8 per cent share in world trade, amounting to USD 432 billion, a 5 per cent decrease from 2022. India’s country rank improved from 18 in 2022 to 17 in 2023. India ranked 8th in imports, holding a 2.8 per cent share, with the value at USD 673 billion, marking a 7 per cent decline from the previous year. India’s country rank improved from 9 in 2022 to 8 in 2023. In the area of commercial services trade, India ranked 7th globally in exports, capturing a 4.4 per cent share of the global market at USD 344 billion, which is an 11 per cent increase over 2022. India’s country rank remained the same as in 2022. Imports of commercial services ranked 9th globally, capturing a 3.4 per cent share of the global imports at USD 247 billion, with country rank decreasing from 8 in 2022 to 9 in 2023.
The WTO report has projected that the world merchandise trade volume will grow by 2.6 per cent in 2024 and the growth will continue at 3.3 per cent in 2025. It, however, does not include impact on trade values which is commonly used parameter to measure trade performance. The Global Trade Research Initiative (GTRI) has forecast a 1.2 per cent drop in world merchandise trade values in 2024, over 2023.
Calculating the trade value is straightforward, as it involves adding up the values of all transactions. However, calculating trade volume is not as simple as just adding up quantities of different goods like iron ore and diamonds, which could lead to inaccurate conclusions. The WTO employs a complex method to calculate changes in trade volumes.
The GTRI forecast uses historical trends showing how trade volumes and relate to trade values.
The World Trade Performance 2023 shows the US dollar value of world merchandise trade fell 5 per cent in 2023 to USD 24.01 trillion, but this decline was mostly offset by a strong increase in commercial services trade, which rose 9 per cent to USD 7.54 trillion. This allowed world goods and commercial services exports on a balance of payments basis down just 2 per cent in 2023 at USD 30.8 trillion. In 2023, merchandise exports totalled USD 23.8 trillion, while imports were USD 24.2 trillion. This represents a decrease of 4.5 per cent in exports and 5.4 per cent in imports compared to 2022. For commercial services, exports rose to USD 7.8 trillion and imports to USD 7.2 trillion in 2023. This category saw an increase of 10.8 per cent in exports and 10.9 per cent in imports from the previous year.
Overall, the total trade (both merchandise and services) slightly decreased in 2023, with exports at USD 31.6 trillion (down by 1.1 per cent) and imports at USD 31.5 trillion (down by 2.1 per cent) compared to 2022.
The decline in world merchandise trade was due to geopolitical tensions, rising protectionism war at Ukraine, red sea shipping disruptions, lower primary commodity prices, and exchange rate fluctuations. The decline on the export side was led by the Russian Federation, whose exports plunged 28 per cent as well as by manufacturing-oriented Asian economies, including India with exports down 5 per cent, Japan with exports down 4 per cent and the Republic of Korea by 8 per cent.
Merchandise imports were down in most economies, partly due to falling prices for energy and other commodities. The natural gas prices fell 63 per cent on average in 2023. The average price of crude oil since the start of the year was also down 30 per cent from its peak in 2022.
As for reasons for growth in the world services trade, in contrast to merchandise trade, the US dollar value of world trade in commercial services was up 9 per cent in 2023 to USD 7.54 trillion as spending on international travel and surging digitally delivered services continued to recover from the COVID-19 pandemic. Strong growth was recorded despite the decline in transport, which dropped 8 per cent to USD 1.50 trillion. Transport formed almost a quarter of global services trade in 2022.
According to WTO estimates, global exports of digitally delivered services reached USD 4.25 trillion in 2023, up 9.0 per cent year-on-year, and accounting for 13.8 per cent of world exports of goods and services. In 2023, the value of these services—traded cross-border through computer networks and encompassing everything from professional and management services to streaming of music and videos, online gaming, and remote education—surpassed pre-pandemic levels by over 50 per cent.