What’s in the news?

• A recent report by the United Nations Conference on Trade and Development (UNCTAD) noted that India’s trade reliance on China and the European Union is rising as global trade is witnessing a marked shift along geopolitical lines.
• This comes in the backdrop of major supply chain reset following the pandemic and the Russia-Ukraine war that had sent food and fuel prices to record highs.
• The UNCTAD estimates, based on national statistics, showed that India’s dependence on China and the European Union (EU) grew by 1.2 per cent while its reliance on Saudi Arabia slid by 0.6 per cent.
• This came despite India’s efforts to cut reliance on China by implementing its flagship Production-Linked Incentive (PLI) scheme and Quality Control Orders (QCOs) largely to limit entry of cheap Chinese products.
• UNCTAD’s estimates showed a major shift in trade due to the ongoing Russia-Ukraine war. While Russia’s trade dependence on China surged by a record 7.1 per cent, its reliance on the EU slid by 5.3 per cent.
• The report showed that global trade declined in most sectors, except for pharmaceuticals, transportation equipment, and road vehicles, particularly, electric cars.
• The report further said that the value of global merchandise trade has experienced continuous decline since mid-2022. Trade in goods expected to contract by about US$ 1.3 trillion or 5 per cent in 2023. But services trade is expected to gain about $500 billion, or 8%.