'Trade flux, global strains cloud exports'

Global tensions, trade policy uncertainties, volatile commodity prices and financial market fluctuations pose significant risks to global and domestic growth, the Union finance ministry said, at a time when India is working to limit the impact of US tariff actions.

- Rhik Kundu

In FY25, India's exports slowed due to tariff-related developments across multiple countries, increasing trade risks and disrupting global investment and trade flows, the ministry said in the economic review for February released on Wednesday.

"The Global Trade Policy Uncertainty Index rose to a record high of 237.4 in Q4 2024. Tariff-related developments in multiple countries have heightened trade-related risks, affecting investment and trade flows globally. Consequently, India's exports have recorded softer growth thus far in FY25. However, a robust services trade surplus continues to offset the impact of lower growth in merchandise exports," the review said.

India's goods exports rose a tepid 1.39% year-on-year to $358.91 billion in April 2024January 2025, while imports grew 7.43% to $601.90 billion, leaving a trade deficit of $22.99 billion as of January 2025, according to commerce ministry data.

In addition to slowing global trade and an economic slowdown in advanced economies, US President Donald Trump's reciprocal global tariffs could further disrupt several markets, including India.