India to Fire Global Trade Engine Amid Rise of Global South
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India & China Trade Growth to Slow Down: report
By Raisina Correspondent
New Delhi, January 17: The Boston Consulting Group in a report said that “India is emerging as the other big Global South trade story as it pursues favourable relations with most of the world’s major economies”.
“We project 6.4% CAGR in India’s total trade through 2033, to $1.8 trillion annually, roughly in line with its high GDP growth,” said the BCG in its report – Great Powers, geopolitics, and Future of Trade.
It stated that “among the drivers will be India’s growing popularity as a production base for companies seeking to diversify supply chains concentrated in China, hefty government incentives for manufacturing, a huge low-cost workforce, and rapidly improving infrastructure”.
“Geographically, India’s trade growth will be broadly based. Annual trade with the US is expected to more than double over the next decade, to $116 billion in 2033,” said the report.
It also stated that the “trend will reflect stronger political and economic ties between the world’s two biggest democracies, especially in areas like defence and technology”. “We forecast that India’s trade with the EU, ASEAN, and Africa will increase by around 80% over the next decade. It is projected to nearly double with Japan and Mercosur nations, and more than triple with Australia and South Korea,” added the BCG report.
It also stated “trade with Russia is also projected to surge as India imports cut-rate Russian hydrocarbons”. The BCG on India and China trade said that while bilateral trade growth is still strong it is expected to moderate.
“Among the reasons are India’s growing bilateral trade deficit with China, which has fueled economic unease in New Delhi. India is also becoming more skeptical of Chinese direct investment in its economy, particularly in sensitive sectors,” added the BCG in its report.
This economic wariness is compounded by an ongoing border dispute between the two nations, it added. “Based on our analysis of trade and economic data for more than 150 countries, as well as the expected impact of recent national and regional policy initiatives, we have identified several tectonic shifts in global trade corridors,” said the BCG at the outset in its report.
It stated that “China will emerge as the stronger trade partner for the rest as its commerce with the West slows”. The report also examined the possible impact of tariff by the US on several countries.
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