Trade data frames challenge in time of war, Pg11

Key Highlights:

• In 2025-26, global trade faced disruptions due to reciprocal tariffs imposed by the US and conflict in West Asia.
• China recorded a trade surplus of $1.2 trillion in 2025 despite trade wars.
• India's merchandise exports in 2025-26 were $441.78 billion, marginally higher than the previous year.
• Exports to West Asia fell by 57.95% in March, dragging down overall goods exports by 74%.
• As of April 15, Brent crude was trading around $95.8 per barrel, while India’s crude basket was around $110 per barrel.

Detailed Insights:

• Labor-intensive sectors like gems, jewellery, textiles, and leather performed poorly in 2025-26, while electronic goods exports, driven by smartphones, neared $48 billion.
• Trump’s tariffs, the Iran war, and the blockage of the Strait of Hormuz significantly impacted India's exports, with exports to the US showing minimal growth.
• Exports to the UAE decreased by 61.93%, and to Saudi Arabia by 45.67% in March due to disruptions in West Asia.
• Elevated oil prices, with Brent crude at around $95.8 per barrel, could increase India's deficit-to-GDP ratio by 30-40 basis points for every $10 per barrel increase.
• The extent of trade disruptions in April will depend on talks between Iran and the US and the movement of cargo through the Strait of Hormuz.

Key Concepts Involved:

• Trade Surplus: The amount by which a country's exports exceeds its imports.
• Current Account Deficit: The shortfall when a country's total imports of goods, services, and transfers is greater than its total exports.
• Tariffs: Taxes imposed on imported goods or services.