Global Trade Competitiveness and India's Role in the World Economy

Global trade is being reshaped by supply-chain reconfiguration, digitalization, and strategic industrial policy. India shows a mixed but improving profile: a modest merchandise-export share (~1.82%), a rising commercial-services share (~4.6%), stronger logistics performance (LPI rank 38/139, 2023), resilient FDI inflows (US$28.2 bn, 2023), and robust growth momentum (~7.3% in 2024). This paper synthesizes structural drivers of competitiveness costs, capabilities, connectivity, and compliance alongside policy levers such as FTAs, cluster-led manufacturing (e.g., PLI), and digitally delivered services. We present current indicators, analyze constraints, and outline pathways to deepen India’s participation in goods and services value chains while sustaining macro stability and inclusiveness. At the same time, trade fragmentation and rising non-tariff measures complicate market access, making quality infrastructure and standards compliance pivotal. India’s comparative strengths in human capital and digital public infrastructure can offset some scale and cost disadvantages in goods. Finally, targeted logistics upgrades and supplier-capability programs can convert FTAs into realized market share rather than tariff-arbitrage episodes.