| 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.
