All predictions of how global trade would develop in the upcoming year are made more difficult by US President-elect Donald Trump’s liberal use of tariff threats prior to his inauguration in January. However, Indian exporters are generally optimistic about the outlook, with their main concern being the slowdown in demand in larger markets.
Following an increase this year, the World Trade Organization (WTO) has projected that global commercial trade will grow by 3% in 2025. The growth rate of Indian exports has been averaging for the world. Compared to the same period last year, merchandise exports increased by 2% to $400 billion between January and November.
The Federation of Indian Export Organisations (FIEO) expects a slow start to 2025 and improvement in trade in the second half as the incoming Trump administration is expected to make efforts to end wars in Gaza and Russia-Ukraine. Trump’s tariff challenge will remain and will have to be navigated deftly.
According to Ajay Sahai, the CEO and Director General of FIEO, the recent decline in freight rates indicates that either the market has slackened or there is enough inventory piled up that new purchases will be delayed coming on stream. Trump has frequently stated that the Middle East conflict must stop immediately. Trump declared on December 22 that Russian President Vladimir Putin had indicated a desire to meet with him to discuss the conflict with Ukraine.
He claimed that after the Middle East’s conflicts are resolved, the Red Sea region will see an improvement in conditions, allowing for the reopening of the Suez Canal. Since early 2014, container ships have been bypassing Red Sea routes entirely in favor of longer routes via the Cape of Good Hope. lengthier journey durations and higher freight rates are the results of the lengthier routes. Europe may become more demanding after the Russia-Ukraine issue is resolved.
