- The United Nations Conference on Trade and Development (UNCTAD) Global Trade Report indicated a developing trade landscape for India, with a greater reliance on China and the European Union (EU).
About UNCTAD
- UNCTAD is a permanent international organisation created by the United Nations General Assembly in 1964.
- It is part of the United Nations Secretariat.
- The UNCTAD Conference typically meets every four years.
- It reports to the United Nations General Assembly and the Economic and Social Council, but has its own membership, leadership, and budget.
- It is also a member of the United Nations Development Group.
- It helps developing countries reap the benefits of a globalised economy in a more equitable and effective manner.
- Reports published by the UNCTAD are-
- Trade and Development Report
- World Investment Report
- Technology and Innovation Report
- Digital Economy Report
Membership:
- UNCTAD membership includes all 195 member states of the United Nations.
- India is an active member. The second UNCTAD Conference was held in New Delhi, India, in 1968.
Key Highlights of the Report:
- Key Findings on India
- Trade Trends: India’s trade dependency on China and the EU increased by 1.2%, while its reliance on Saudi Arabia decreased by 0.6%.
- Factors: This transition occurred during supply chain interruptions caused by the pandemic and the Russia-Ukraine conflict, which resulted in record-high food and fuel prices.
- Policy Measures: Despite efforts to lessen reliance on China through measures such as the Production-Linked Incentive (PLI) scheme and Quality Control Orders (QCOs), India’s commercial relations with China have improved.
- Insights from the Report
- Stable Proximity: The geographic proximity of international trade has remained generally consistent, demonstrating minimal near-shoring or far-shoring patterns.
- Political Proximity: However, there has been a considerable increase in the political proximity of commerce, which benefits countries with comparable geopolitical viewpoints.
- trading Concentration: Major trading ties dominated global commerce, yet this trend slowed by the end of 2023.
- Sectoral Trends: With the exception of pharmaceuticals, transportation equipment, and electric vehicles, the majority of sectors saw a decrease in trade values.
- Global Forecast: Global merchandise trade is forecast to fall 5% in 2023, while services trade is expected to grow 8%.
- Impact of Russia-Ukraine Conflict
- The protracted war increased Russia’s trade dependency on China by 7.1% and decreased its reliance on the EU by 5.3%.
- Oil Trade: Russian oil switched from the EU to China and India, with China emerging as an important trading partner for Russia.
- US Trade Dynamics: In 2023, the US managed to reduce dependency on China by 1.2%, while growing reliance on the EU and Mexico.
Source: https://unctad.org/system/files/official-document/ditcinf2023d2_en.pdf