Global Trade Set for a Historic High in 2025: What UNCTAD’s Record Forecast Means for MSMEs and Exporters

Global trade is poised to reach a historic milestone in 2025. According to the latest Global Trade Update released by UNCTAD in December 2025, international trade in goods and services is projected to cross an unprecedented US$35 trillion, representing a strong 7% year-on-year expansion. This surge, amounting to nearly US$2.2 trillion in additional trade flows, marks the highest level of global trade ever recorded and signals a decisive recovery from the post-pandemic and post-tightening slowdown seen in previous years.

For MSMEs, exporters, and emerging-market businesses, this milestone is far more than a statistical achievement. It reflects a restructuring of global trade patterns, renewed consumer and industrial demand, and the emergence of new opportunity corridors beyond traditional Western markets—a shift that carries significant implications for India’s MSME-led export ecosystem.

Growth Driven by Real Demand, Not Inflation

A key insight from UNCTAD’s assessment is that 2025’s trade expansion is increasingly volume-led rather than price-led. Earlier in the year, elevated prices contributed to higher trade values. However, by the fourth quarter, falling prices of traded goods meant that growth was sustained by actual increases in trade volumes, indicating genuine demand recovery across multiple regions.

Trade in goods is expected to account for nearly US$1.5 trillion of the total increase, while services trade—including IT services, logistics, consulting, digital solutions, and professional services—will add approximately US$750 billion, growing at a faster pace of nearly 9%. This strong performance of services trade is especially relevant for India, which remains one of the world’s largest exporters of IT-enabled and knowledge-based services.

The Global South Takes Centre Stage

One of the most structurally important shifts highlighted by UNCTAD is the growing role of emerging economies and South–South trade. Trade among developing countries expanded by nearly 8% over the last four quarters, underscoring deeper economic integration within the Global South.

Regionally, East Asia emerged as the strongest performer, with exports rising by around 9%, supported by resilient manufacturing supply chains and rising intra-regional trade, which itself expanded close to 10%. Africa, too, showed encouraging momentum, benefiting from increased demand for agricultural commodities, minerals, and basic manufactured goods.

For Indian MSMEs, this trend validates the strategic pivot toward Africa, ASEAN, West Asia, and Latin America, reducing overdependence on Europe and North America and opening new avenues for diversified export growth.

Sectoral Signals MSMEs Cannot Ignore

UNCTAD’s sectoral analysis reveals sharp contrasts that MSMEs must closely monitor. Manufacturing, particularly electronics and high-tech components, posted a robust 14% growth, driven by surging demand linked to artificial intelligence, data centres, automation, and digital infrastructure.

The agriculture and agri-processing sector also delivered strong performance, growing by around 8%, with cereals, oilseeds, fruits, and vegetables recording double-digit gains in several markets. This presents a major opportunity for Indian agri-exporters, food processors, and value-added farm enterprises.

In contrast, global automotive trade weakened, declining about 4% year-on-year. Traditional internal combustion engine vehicles saw sharp contraction, while even electric vehicle trade softened, reflecting cost pressures, changing subsidy regimes, and uneven consumer demand across regions.

What This Means for Indian MSMEs

For India’s MSME sector—responsible for nearly half of the country’s exports—the UNCTAD report carries both optimism and caution. The positive signals include diversified global demand, strong manufacturing and services growth, and expanding South–South trade routes. However, UNCTAD also flags looming risks for 2026, including geopolitical tensions, high global debt levels, rising logistics costs, and potential demand moderation.

MSMEs that invest in market diversification, digital trade enablement, compliance readiness, logistics efficiency, and financial resilience will be best placed to sustain growth as the global trade environment becomes more complex.

SMEStreet's Perspective

The projected record-breaking trade flows of 2025 reaffirm one crucial reality: global trade is not retreating—it is reorganising. For Indian MSMEs, this is a pivotal moment to move from opportunistic exporting to strategic global positioning, leveraging new markets, new technologies, and new partnerships.

The window is open—but only agile, future-ready enterprises will be able to convert this global momentum into lasting competitive advantage.