It is generally known that China has overtaken the United States as the world’s largest trading partner in the past ten years, while India has merely limped along. Even if China and India are being compared on a number of fronts, India may not stand out too much in the export department. Despite this, it is important to highlight that India has achieved significant strides in both trade modernization and exporting partner variety.
The future does appear promising, and there is hope for closing the gap between China and the rest of the globe. The gap might not close, but it will undoubtedly get smaller. How? A chance for India is presented by the growing interest in diversifying global supply chains away from China and the relocation of locations away from Europe due to geopolitics. This is going to be one of the important causes of the structural change in Indian exports. The safety net for protecting India against potential commodity-driven trade deficits in the future will be strengthened by support from rupee-denominated trades and regulatory initiatives to encourage exports.
World commerce increased from $6.2 trillion to $18.3 trillion between 2001 and 2011 at a CAGR (compound annual growth rate) of 11%. Nevertheless, it slowed in the following ten years to just around a 2% CAGR to $22.3 trillion by 2021, with a decline in commodity prices and comparatively low inflation helping to drive the trend. China and India experienced growth of 22% and 6%, respectively, while India experienced growth of 21% and 3%.
China’s exports increased significantly from $250 billion in 2000 to $1.6 trillion by the year 2010 and $3.3 trillion by the year 2021. As a result, it increased from 4% in 2001 to 15% of global trade in 2021, more than triple that amount in that time. The combined proportion of the European Union is 18% in contrast. The top exporter today is China, which surpassed the US in 2007 and has held that position ever since.
Over the past twenty years, India’s trading basket has changed. Textiles and gems and jewellery dominated the early years of the millennium, but today the mix includes gasoline, base metals, technical products, medicine, cars, and chemicals. Similar to this, engineering items have become more significant among imports, except oil (which accounts for one-third of them). Plastics, metals, and chemicals have all seen modest gains.
