Global Trade Shifts: India and ASEAN Poised for Growth Amid Rising Tariffs

Amid ongoing geopolitical changes, India and the ASEAN region are emerging as key players in global trade. India's trade is predicted to grow significantly, driven by its rising status as a manufacturing hub. However, rising US tariffs pose challenges, especially impacting sectors like biopharma and auto parts.

India and the ASEAN region are positioned as significant beneficiaries amid global geopolitical shifts, according to a recent Boston Consulting Group (BCG) report. Forecasts indicate that India's trade will expand annually by an impressive 6.4 percent, hitting USD 1.8 trillion by 2033. BCG's Managing Director, Nishant Gupta, emphasized India's emerging role as a global manufacturing hub, foreseeing substantial growth in GDP and trade.

Similarly, ASEAN's trade is projected to grow at a rate of 3.7 percent annually, propelled by enhanced manufacturing capabilities and deeper integration within industrial value chains. However, proposed US tariff hikes, particularly a 20 percent increase on imports from India, could result in an additional USD 14.6 billion in duties. Such tariffs would notably impact India's biopharma and auto parts sectors.

Overall, the global trade environment is expected to transform by 2033, with the projected value reaching USD 29 trillion. This shift is fueled by changing trade dynamics, with China increasingly engaging with the Global South as a strategy to diversify economic dependencies. Meanwhile, North American and European regions are reinforcing trade alliances to bolster resilience against global disruptions.

(With inputs from agencies.)