UNCTAD Global Trade Update December 2025: Global Trade Set for Record $35 Trillion in 2025; India Leads Services Exports Momentum
SDG 8: Decent Work and Economic Growth | SDG 17: Partnerships for the Goals
Ministry of Commerce & Industry | Ministry of External Affairs (MEA) | Reserve Bank of India (RBI)
The UNCTAD Global Trade Update: December 2025 forecasts that international trade will reach a record-breaking figure, exceeding $35 trillion in 2025—a roughly 7% increase over 2024. While trade growth slowed in Q3 2025 to 2.5% quarter-on-quarter (QoQ), driven by services (4% QoQ) and goods (nearly 2% QoQ), the year’s momentum was sustained by strong performance in developing economies, particularly East Asia, Africa, and South-South trade.
Key trade trends include:
Sectoral Performance: Manufacturing trade led the trailing four quarters (T4Q) growth (around 10%), driven by non-electrical machinery, and iron and steel (40% T4Q growth). Electronics trade outpaced manufacturing averages (14% T4Q growth), supported by rising AI-related demand. Trade in natural resources saw negative T4Q growth due to falling mineral fuel prices.
Outlook for 2026: Global trade growth is expected to be more muted, marked by caution due to slowing global economic growth, rising geopolitical fragmentation, continued trade policy uncertainty (especially in the US), and heightened trade costs.
Geoeconomic Shifts: Trade growth between politically close countries (Friendshoring) remains above historical averages. Global trade concentration—faster growth among the largest economies—also reversed its downward trend in Q3 2025.
What is South-South trade in the context of global commerce? South-South trade refers to the trade in goods and services between developing economies, primarily located in the Southern Hemisphere. This trade pattern is expected to continue expanding, supporting diversification, resilience, and the creation of stronger intra- and inter-regional trade networks, thereby reducing dependence on developed markets.
India-Specific Details
India demonstrated mixed trade performance in Q3 2025, but continued to be a global leader in the vital services sector:
Services Trade Leadership: Over the past 12 months (T4Q), India was among the global leaders in services export growth (13% T4Q), only slightly behind China (16% T4Q).
Q3 Services Momentum: Services import growth saw strong momentum at 8% quarter-on-quarter (QoQ), while services exports grew by a modest 2% QoQ.
Goods Trade Performance: Goods imports saw a modest increase of 1% QoQ (4% T4Q growth), while goods exports also grew by 1% QoQ (1% T4Q growth).
Trade Imbalance: India continued to run a trade deficit in goods over the last four quarters (Q4 2024 to Q3 2025), reflecting higher imports than exports.
Geoeconomic Relations: India’s trade dependence on the Russian Federation increased by 0.7% over the T4Q period, indicating growing bilateral economic ties. Conversely, India’s bilateral trade deficit with Canada stood at $113 billion over the T4Q period, which increased by $2 billion in Q3 2025 alone.
Policy Relevance
India’s sustained leadership in services exports, particularly compared to its limited goods export growth, reinforces the need for the government to accelerate reforms targeting manufacturing competitiveness and integration into resilient global value chains (GVCs). Furthermore, the trend of rising trade costs and friendshoring globally necessitates strategic diplomatic engagement to secure GVC nodes and protect the services sector from fragmentation.
Follow the full report here: UNCTAD Global trade update