india-s-trade-set-to-soar-over-1-8-tn-by-2033

India’s total trade is projected to reach USD 1.8 trillion by 2033, growing at a compound annual growth rate of 6.4 per cent, according to a report by the Boston Consulting Group.

 

The surge is attributed to India's increasing appeal as a manufacturing hub, particularly for companies looking to diversify supply chains away from China.

 

The Indian government’s extensive incentives for manufacturing, along with a vast low-cost workforce and improving infrastructure, have strengthened the country’s position as a global trade and investment destination.

 

These factors are driving foreign interest in India’s production capabilities, making it a key player in international commerce.

 

India’s trade growth is expected to be geographically diverse. Trade with the United States is set to more than double over the next decade, reaching USD 116 billion by 2033.

 

This expansion reflects strengthening economic and political ties between the two nations, particularly in the defence and technology sectors.

 

India’s trade relations with the European Union, ASEAN, and Africa are also expected to grow by approximately 80 per cent.

 

Additionally, trade with Japan and Mercosur nations is projected to nearly double, while trade with Australia and South Korea is set to more than triple.

 

A significant increase in trade with Russia is anticipated, largely driven by India’s rising imports of discounted Russian hydrocarbons.

 

The report also highlights Europe’s growing trade engagements with India, Turkey, and Africa, reinforcing India’s role in global supply chains.

 

Sectors such as information technology, pharmaceuticals, and manufacturing will be key contributors to India’s expanding trade relations with the European Union.

 

At the same time, India is taking a cautious approach towards Chinese investments in critical sectors. Ongoing border tensions between the two nations have led India to seek stronger trade ties with other partners.

 

While India’s trade with Western economies is expected to maintain its upward trajectory, China’s trade with the West is likely to slow down.

 

In response, China is strengthening its economic engagements with India, Russia, ASEAN, Africa, and Mercosur nations. However, concerns over China’s significant trade surpluses—driven by excess production capacity—are mounting.

 

This could lead to increasing resistance not only from the United States and European Union but also from India and other global trade partners.