India’s trade reliance on China, EU rises in Q1: UNCTAD

India’s trade reliance on the European Union (EU) and China rose in the January-to-March quarter, while its dependence on Saudi Arabia declined, data from the United Nations Trade and Development (UNCTAD) showed.

India’s trade dependence on China and the EU grew by 1.2% and 1%, respectively, from the year-ago quarter, while its reliance on Saudi Arabia dropped by 0.5%, UNCTAD said in its latest Global Trade Update.

The reliance of one economy on another is measured by comparing their trade with each other to the total trade of the dependent economy. Annual change is calculated by averaging this comparison over four quarters and comparing it to the same period last year.

Globally, trade growth during the first quarter was driven by increased exports from China (9%), India (7%), and the US (3%), while Europe and Africa disappointed, the UNCTAD report said.

Trade growth varied across sectors, with green energy and artificial intelligence (AI)-related products seeing stronger growth, it said, while adding that the outlook for 2024 remains positive but geopolitical issues and industrial policies will continue reshaping global trade patterns.

China showed no change in overall merchandise imports in Q1 from the prior quarter and reported a 12% drop annually. In comparison, Indian and Japanese imports fell by 1% and 5% in Q1 from the prior quarter and 6% and 16% annually, respectively.

Trade value of high-performance and other automatic data processing machines increased from the first quarter of last year. Global trade of high-performance servers, which includes processing units without keyboards and a monitor, went up to $25 billion in Q1 from $20 billion in the comparable period last year.

UNCTAD has projected a 2% growth in global trade, including goods and services, in the first six months of 2024. This growth will add $250 billion to goods trade and $100 billion to services trade compared to the last six months 2023. If the positive trade continues, global trade will likely surpass its record level in 2022 and reach $32 trillion, it said.