India’s share in US information and communication technology (ICT) imports has contracted as a result of the realignment of trade patterns. Some countries are increasingly looking at “re-shoring” production and shifting trade towards friendly nations, a World Trade Organisation report said Wednesday.
Of the total ICT imports by the US, the share of Asian trading partners (mostly India) fell to 32.6% in 2023 from 45.1% in 2018 while for North American partners (mostly Canada) it increased to 23% from 15.7% in the same period, the WTO’s Global Trade Outlook.
The decline in India’s share in US ICT services imports is despite the increase in its exports in absolute terms.
US imports of services from India were an estimated $33.2 billion in 2022, 14.6% ($4.2 billion) more than in 2021. A big chunk of services exported to the US is ICT services. India’s total services exports in 2023 are expected to be around $ 344 billion, up 13.9% on year. Around half of India’s total services exports come from information technology services.
India is the sixth biggest exporter of services in the world with a share of 4.4% of world trade.
Global commercial services exports grew 9% to $ 7.54 trillion in 2023. According to WTO estimates, global exports of digitally delivered services reached $ 4.25 trillion in 2023, up 9.0% year-on-year, and accounting for 13.8% of world exports of goods and services.
Digitally delivered services are traded cross-border through computer networks and encompass everything from professional and management services to streaming of music and videos, online gaming and remote education.
The report also says in response to economic shocks and geopolitical tensions some governments have become more sceptical about the benefits of trade and have taken steps aimed at re-shoring production and shifting trade towards friendly nations. These actions have had some impact on trade patterns but evidence of a sustained trend toward deglobalization remains scant.
Trade in intermediate goods provides a useful gauge of the status of global value chains (GVCs).
Between the second quarter of 2022 and the fourth quarter of 2023, the value of world trade in intermediate goods fell nearly 11%. For the whole of 2023, intermediate goods trade was down 6% while trade in non-intermediates was flat.
Over the same period, the share of intermediate goods in world merchandise trade dropped from 58% in the second quarter of 2022 to 54% in the fourth quarter of 2023.