India's total trade projected to reach $1.8T in 8 years
What's the story
India's total trade is tipped to grow at a CAGR of 6.4% through 2033, reaching $1.8 trillion annually, a Boston Consulting Group (BCG) report stated.
The expected growth is primarily due to India's growing appeal as a production hub for companies looking to diversify their supply chains away from China.
The Indian government's huge manufacturing incentives, a vast low-cost workforce, and fast-improving infrastructure are further bolstering India's global standing.
Trade expansion
India-US trade set to double by 2033
India's trade expansion is not restricted to one region but across continents.
Trade with the US is expected to more than double in the next decade, touching $116 billion by 2033.
The increase reflects deepening political and economic ties between the two largest democracies, especially in defense and technology sectors.
Trade with EU, ASEAN and Africa is also predicted to grow by around 80%.
Diverse growth
Trade with Japan, Mercosur nations to nearly double
The BCG report also predicts that India's trade with Japan and Mercosur (South American trade bloc) nations will almost double.
Meanwhile, its trade ties with Australia and South Korea will more than triple.
A major jump is also likely in trade with Russia, fueled by higher imports of discounted Russian hydrocarbons.
This varied growth highlights India's growing dominance in the global trade arena.
Sectoral contribution
Europe's trade with India to accelerate
Europe's trade with India, Turkey, and Africa is likely to pick up pace, further cementing India's position in the global supply chain.
The information technology (IT), pharmaceutical, and manufacturing sectors are expected to be major drivers of this growth.
This development marks a shift in global trade dynamics and underlines the increasing significance of these sectors in India's economy.
Strategic alliances
India seeks new trade partnerships amid tensions with China
India is growing increasingly cautious of Chinese investments in sensitive sectors, a fear further aggravated by the ongoing border disputes.
These economic tensions are forcing India to look for more trade partners elsewhere.
While India's trade growth with the West remains strong, China's trade with Western economies is likely to slow down.
In turn, China is bolstering its economic ties with India, Russia, ASEAN nations, Africa and Mercosur countries.