World Trade Report 2025

19 Sep 2025

Recently, The World Trade Organization (WTO) released its World Trade Report 2025.

Key Projections

Trade Growth: AI could increase global goods and services trade by nearly 40% by 2040.
GDP Gains: Global GDP projected to rise by 12–13% across scenarios.
Digitally Deliverable Services: Largest growth (42%) expected in AI-driven digital services (e.g., AI tools, IT-enabled services).
Trade Efficiency: AI enhances supply chains, automates customs, reduces language barriers, strengthens market intelligence.

Adoption Gap: Only 41% of small firms use AI, compared to over 60% of large firms.
Wages:
- Real wages expected to rise for all labour groups.
- Skill Premium: Projected to decline by 3–4%, as AI substitutes tasks of medium- and high-skilled workers more than low-skilled ones.

Definition: The skill premium is the wage difference between high-skilled workers (e.g., professionals, engineers, analysts) and low-skilled workers (e.g., manual labour, routine tasks).
Measurement: Typically expressed as the ratio of wages of high-skilled to low-skilled workers.
Economic Insight:
- A high skill premium indicates strong demand for skilled labour relative to supply.
- A decline in skill premium means the wage gap is narrowing, often due to automation/AI reducing demand for skilled tasks while still raising overall wages.

Digital Divide: Income inequality could widen if low-income economies fail to upgrade digital infrastructure.
Market Access Issues: Bound tariffs on AI-enabling goods remain as high as 45% in some low-income economies.
Exclusion Risks: WTO cautioned that workers and entire economies risk being “left behind,” fueling trade tensions.

Global AI Governance: WTO calls for shaping inclusive AI development through:
- Improved market access for AI-related goods and services.
- Greater transparency and dialogue on trade-related AI policies.
Inclusive Growth: Investments in digital infrastructure and skills development essential to prevent exclusion.

PW OnlyIAS Extraedge

Digital Services Strength: India is already a global leader in IT and digitally deliverable services (>$250 bn exports in 2023–24). AI-driven trade growth (42% in digitally deliverable services) could significantly benefit India.
Cost Efficiency: AI tools can enhance supply chain visibility, automate customs, and reduce operational costs, improving India’s trade competitiveness.
Innovation and Startups: India has over 5,000 AI-focused startups; increased AI patenting and global collaborations could position India as an innovation hub.
SME Integration: With proper support, AI adoption could help small and medium enterprises (SMEs) integrate into global value chains.
Labour Upskilling: India’s large young workforce can be trained in AI-related skills, tapping global demand.

Digital Divide: Rural-urban disparity in digital infrastructure could limit inclusive benefits; SMEs lag in AI adoption.
Labour Market Disruption: AI could displace medium- and high-skilled jobs in IT, BPO, and financial services, sectors critical for India’s employment.
Tariff and Market Barriers: Bound tariffs on AI-enabling goods in some economies could restrict India’s access.
Global Governance: If WTO’s AI governance framework is shaped mainly by developed nations, India may face restrictive norms.
Skill Premium Decline: Declining wage advantage for skilled labour could affect India’s white-collar job market.

About: The World Trade Report is an annual publication that provides insights into global trade trends, trade policy challenges, and the functioning of the multilateral trading system.
Released by: World Trade Organization (WTO).
Theme for 2025: “Making trade and AI work together to the benefit of all” – Impact of Artificial Intelligence (AI) on Global Trade.

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