Pale green shoots

Syllabus: GS III, Subject: Economy, Topic: Trade and External Sector, Issue: Trade composition and trends

Context: India’s merchandise exports reached a 12-month peak.

Key concerns for India’s trade and external sector:

  • The World Trade Organisation(WTO) downgraded its global trade volume growth projection to 2.6% from 3.3%.
  • A healthy monsoon in India is expected to boost domestic demand, including for discretionary imports.
  • Disruptions on key shipping routes and geopolitical tensions.
  • Rising shipping costs pressure exporters to raise prices, exposing them to competition.
  • Prolonged friction in the Strait of Hormuz could threaten trade and macroeconomic balances.
  • Any spike in global energy and food prices could derail hopes of global interest rate cuts and improved demand.
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