Both India and Bangladesh face exceedingly high tariffs from the US – 27% and 37%, respectively – which led some to hope the South Asian giants would band together and strengthen their trade ties. Instead, the relationship is souring, potentially disrupting trade and shipping routes in the entire region.

On 13 April, Bangladesh stopped all land imports of yarn from India, ostensibly to protect domestic producers from foreign competition. The restriction effectively acts as an expensive tariff for Indian imports, as all yarn must now travel via sea or air routes, which is far more costly and may lead to delays as sea routes become backed up due to the excess traffic. 

After the restriction was announced, India withdrew transshipment facilities for Bangladesh on 8 April, citing “congestion”. Since 2020, Bangladesh had been transporting goods, especially clothing, to India by road and using Indian ports, stations, and airports to get them to their final destination in Europe or the US. 

This made exporting much faster for Bangladeshi producers, cutting down transit times from eight weeks to one. Bangladeshi shipment hubs are not equipped to handle the massive volumes of exports that local producers send abroad; shipping routes are made more dangerous by piracy incidents, which have been on the rise since last year. 

At the moment, the effects of the reciprocal restrictions seem to be limited: trade relations between the two countries “are still underway and form a significant part of our bilateral commerce,” said Sudhanshu Das, a regional minister in Tripura, an Indian region on the border with Bangladesh. 

The relationship between India and Bangladesh, marred by a turbulent partition in 1947, has improved significantly over the past decade, with the resolution of long-standing border disputes and the establishment of treaties and credit lines. When Bangladeshi Prime Minister Sheikh Hasina was forced to resign after months of unrest, she took refuge in India; the new Bangladeshi government demanded her extradition, which the Indian government is refusing while accusing Bangladesh of “systematically persecuting” Hindu minorities.

India and Bangladesh are important trade partners. India is Bangladesh’s second-largest source of imports, responsible for 17% of all imports; most of Bangladesh’s exports go to the US and Europe, in large part because of the country’s second-largest clothing export industry. Bangladesh is India’s biggest trading partner in the subcontinent, but the trade balance is heavily in India’s favour, with a £6.93 billion trade surplus for the Asian giant. 

The restrictions and likely disruption they will cause serve as a powerful example of the way internal politics and even relatively minor diplomatic spats can have a broad-ranging effect on global trade. This is also a sign that the weaponisation of trade is becoming normalised across the world, and that its tools have expanded beyond tariffs to affect trade routes, deep-tier supply chains, and long-standing trade agreements. 

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On Wednesday night, the US Treasury announced the US and Ukraine had reached an agreement on US preferential access to Ukraine’s mineral, oil, and gas resources. 

The agreement, signed by US Treasury Secretary Scott Bessent and Ukraine’s Minister of Economy Yulia Svyrydenko, provides for a “reconstruction investment fund” that will invest in the extraction of Ukraine’s natural resources and its related infrastructure, with profits shared between the two countries after the first 10 years. The document still needs to be approved by the Ukrainian parliament before going into effect.

The deal had been long in the making and has been repeatedly brought up by Trump as a way for Ukraine to “pay back” the US for its extensive military aid. The finalized agreement does not include any requirements for Ukraine to directly reimburse the US for past or future defense aid. 

Instead, the two countries will invest in resource mining; the profits will go into post-war reconstruction for the first 10 years, after which they will be shared between the US and Ukraine. Although the two countries will “jointly manage” the investment fund, Ukraine will retain “full control” over its natural resources, and determine “where and what to extract,” said Svyrydenko. 

Ukraine has extensive deposits of natural resources: it ranks 51st in terms of the world’s largest oil reserves and holds much of the world’s uranium, iron, and natural gas resources. The country is also a crucial source of rare earth metals, a group of elements used in everything from microprocessors for cellphones, to medical technology, cancer drugs, and military guidance systems. 

Right now, the biggest exporters of rare earth minerals are China, Russia, and Malaysia, with most Western countries lacking their own extraction and refinery facilities and thus relying on imports. The EU imports around 40% of its rare earth metals from China, while the US is reliant on China for 70% of its imports, which form the vast majority of its total resources: the US only has one functioning mine and no refineries. 

As the US and China remain locked in a trade war, tariffs and Chinese export restrictions imposed last month will make it harder for the US to source the critical metals. This deal could secure long-term access to natural resources for the US and strengthen US-Ukraine trade despite the past months’ diplomatic difficulties. 

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A massive electrical outage swept through Spain and regions of Portugal and France yesterday, leaving millions without access to electricity, mobile, and internet services. 

While most areas regained power late on Monday night, the blackout laid bare the vulnerability of payments systems.

Many banks in Spain halted access to point-of-sale terminals, leaving shops and restaurants without ways to accept card or online payments from customers. The European Central Bank (ECB) extended its delivery versus payments deadline by an hour in a rare move, almost certainly prompted by the outage, as banks’ central securities depositories struggled to reconcile payments made during the day. 

The blackout, which affected Spain as well as the Basque regions of France and much of Portugal, including Lisbon and Porto, was due to an electrical failure in Spain’s power grid, which in turn affected the connections with its neighbors; overall, an estimated 50 million people were affected. 

The cause of the blackout is believed to be a “rare atmospheric event” that caused extreme temperature variations in Spain, leading to an imbalance in the frequency of the national power grid that had knock-on effects on all surrounding regions. Extreme temperature variations, an effect of climate change and global warming, are expected to sweep through most of Europe this week, with the UK experiencing temperatures as high as 27°C in some areas. 

The outage has had little if any economic impact, as critical infrastructure like hospitals stayed mostly unaffected and many businesses stayed open. The Spanish stock exchange remained functioning throughout the outage, opening this morning with a slight gain. However, the widespread, immediate halt in online payments highlighted the fragility of the international payments system and its reliance on underlying infrastructure. 

Spain’s central bank said that by 15:30 local time – four hours after the beginning of the blackout – its national and cross-border payments system was back to normal. However, bank branches, merchants, and individual businesses experienced problems throughout the day as card readers ran out of batteries and ATMs remained inactive. The ECB postponed the start of the delivery versus payment cut-off by an hour.

Spain is one of the most cash-dependent countries in Europe, despite efforts by the governments to encourage more uptake of online and card payments to decrease corruption. If the blackout had occurred elsewhere, the effect may have been even more pronounced, grinding national economies to a halt: the UK, for example, only has 6% of payments made in cash, compared to Spain’s 57%.

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Aterian, a London-listed metals-focused exploration and development firm, said on Wednesday, 23 April, that it had secured a trade finance agreement with a “global commodity trading and financial house” to fund mineral consignments in Africa.

The five-year trade finance facility is expected to help Aterian transition from an exploration-focused company to an operational trading entity, reducing its reliance on equity financing and accelerating expansion in its African operations. The trading facility will be used to fund tantalum, niobium, and cassiterite mining in Rwanda and its surrounding areas. 

Tantalum and niobium are critical raw materials known for their highly corrosion-resistant properties and used in electronics and metal alloys, while cassiterite is the principal source for tin metal. 

Aterian has been expanding its metals and minerals mining operations throughout Africa, with projects in Rwanda, Morocco, and Botswana. Its mission to remain scalable and grow sustainably has seen it prioritise partnerships: a joint venture with Rio Tinto to explore Rwandan lithium mining, established in 2023, is expected to produce results soon and may lead to the development of a combined lithium, tantalum, niobium, and tin mining operation in the country.

Aterian was established in 2011 to find and develop mineral mining opportunities across Africa and support ethical supply chains to support the transition to sustainable energy production. In January 2024, shortly after the Rio Tinto deal, the firm acquired a majority stake in Atlantis Metals, which holds mineral prospecting licenses for silver, copper, and lithium brine in Botswana. 

The firm’s stock on the London Stock Exchange has fallen by 28% over the past year, hitting a one-year low this month. Concerns over its supply chains and its reliance on Chinese imports have worried investors, especially in light of the US’s recent trade war with China and US President Donald Trump’s threats to impose further tariffs on rare minerals. 

The trade finance agreement comes as mineral exploration and trading are becoming global priorities. Trump has repeatedly framed military aid to Ukraine in terms of mineral mining, and the two countries are reportedly in the process of negotiating a deal on rare earth mineral licenses in exchange for further US support. 

Minerals and critical raw materials like lithium, tantalum, and niobium are becoming more and more crucial to the global economy as they are used in the production of microprocessors, quantum processors, and EV batteries. 

The mining and trade of these critical minerals will become increasingly important as new technology, especially quantum computing and AI, continues to grow; they will also be crucial to enabling renewable energy to expand at scale. 

However, their exploration and mining are fraught with geopolitical difficulties: several mineral-rich countries are embroiled in conflict, and many mineral mining companies are vulnerable to child labour and modern slavery accusations due to their complex, hard-to-monitor supply chains. 

Investment in mineral exploration firms, including through trade finance facilities, will become more and more important to supporting sustainable mining as the world’s economy becomes increasingly reliant on minerals’ potential. 

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As reported by the Financial Times, Apple plans to move all of its US iPhone production to India.

More than 60 million iPhones are sold annually in the US. Apple plans to source this from India in its entirety by the end of 2026. 

This is a significant pivot away from China, where Apple has established its production over decades. An estimated nine in 10 iPhones are made in China – accounting for nearly 200 million devices – and approximately 150 of Apple’s top 187 suppliers had factories in China in 2024.

India is subject to a baseline levy of 10% by the US; the 27% ‘reciprocal’ tariff which it was set to face has now been put on hold until 9 July. 

On the other hand, China has been hit by import taxes of up to 145%, and China has hit back with a 125% tax on American products. Although developments this morning show promising signs of de-escalation – US President Donald Trump told reporters, “We may reveal it later, but they had meetings this morning, and we’ve been meeting with China” – relocating to India may instil more confidence amongst investors.

After Apple entered China in the 1990s, the relationship between the company and the country has been one of reciprocal benefit. As China opened up to the world, Apple grew more entrenched in its manufacturing sector.

In an interview last year, Apple’s CEO Tim Cook said, “There’s no supply chain in the world that’s more critical to us than China.” Both in practice and in threat, tariffs have forced U-turns in manufacturing strategies for many large American businesses.

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Tanzania has blocked all agricultural imports from Malawi, its southern neighbour, and South Africa, Africa’s largest economy. 

Since Malawi is landlocked, it relies on Tanzania’s ports for international trade. Therefore, its top exports – raw tobacco, tea, legumes, soybeans, and sugar – will suffer, particularly since its top trading partners are international (with Germany and India as leading destinations).

The export of fertiliser to Malawi will also be suspended.

South African exports which will be hit include various fruits, including apples and grapes. While relatively muted compared with the impact of Tanzania’s move on Malawi’s economy, South Africa is heavily reliant on exports. Already weakened by 31% tariffs from the US ($500 million worth of South Africa’s $13.7 billion in agricultural exports go to the US), the country may now struggle in the intra-regional reorientation which many other economies are enjoying.

Tanzania has also halted the transit of any agricultural goods through its territory to either country, stymying Malawi’s international importing capability in particular.

Tanzanian Minister of Agriculture Hussein Bashe has justified this policy as retaliatory. Both Malawi and South Africa have embargoes on Tanzanian produce. 

This refers to Malawi’s ban on the import of certain produce, which was apparently designed as a temporary measure: a “strategic move to create an environment where local businesses can thrive without the immediate pressure of foreign competition,” according to Malawi’s Trade Minister, Vitumbiko Mumba at the time.

Tanzania, Malawi, and South Africa are all members of the Southern Africa Development Community (SADC) regional economic bloc. This may grow fraught with Bashe’s emphasis that Tanzania will begin to act in defence of its national sovereignty.

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An ITFA working group has recently developed a template for financial institutions (FIs) granting short-term trade loans via the SWIFT MT799 format. 

The SWIFT MT799 is commonly used by banks to communicate non-binding information on trade finance transactions. While widely used, this system has historically lacked the uniformity to operate across multiple jurisdictions. This has led to difficulty for banks seeking to obtain foreign currency financing, contributing to the barriers to finance which many emerging markets face.

The new template aims to enhance this accessibility for both borrowing and lending banks. It offers clear guidance on topics from floating rate loans with periodic interest resets to different governing laws, and is designed to be concisely focused on practicality. 

Paul Coles, chair of ITFA’s Market Practice Committee, led the working group, which included experts from Sullivan and FCMB Bank (UK).

Geoffrey Wynne, a partner at Sullivan and part of the ITFA working group which developed the template, said, “This template is important because, by provides a starting point for banks to document short term trade loans using SWIFT, it should reduce the time needed to negotiate and finalise the relevant trade loan agreement. 

“While it provides a starting point, the template also allows for the customisation of the documentation to meet the specific needs of individual transactions. We hope this will be key to its success.”

ITFA has emphasised that this template exists to complement other comprehensive frameworks, but focuses on standalone, one-off loans that are solely documented through SWIFT messaging.

The standardisation of this format is intended to provide a benchmark of “what good looks like”. 

The template and accompanying guidance notes are now available to ITFA members through the association’s website, though users are advised to seek legal advice before implementation.

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The International Monetary Fund (IMF) has just published its World Economic Outlook as of April 2025, portending a fall of global GDP growth by 0.5%, to 2.8% for the year. 

This is largely the result of the “major negative shock” that US President Donald Trump’s tariffs have imposed on the global economy.

The report is structured in three chapters, covering global policy, demographic impacts (including of an ageing population), and the impact of refugee and migration policy on economic growth, particularly within developing economies.

Since February, the US has announced multiple waves of tariffs against trading partners, culminating in near-universal levies on 2 April, which triggered historic drops in equity markets. Though markets partially recovered following pause announcements after 9 April, uncertainty—especially regarding trade policy—has surged to unprecedented levels.

The impacts of tariffs, IMF reports, vary considerably across countries. In the US, where demand was already softening, growth projections have been lowered to 1.8% for this year, with tariffs accounting for nearly half the reduction. China’s growth forecast has been cut to 4%, reflecting weaker external demand. The eurozone faces a more modest reduction to 0.8%, with stronger fiscal stimulus providing some offset.

Source: IMF

Global trade growth is expected to decline more severely than output, dropping to just 1.7% in 2025. 

The report presents several forecast scenarios reflecting differing policy paths. A pre-April 2 forecast (excluding the most recent tariff escalation) would have yielded 3.2% global growth in both 2025 and 2026. A model-based forecast incorporating announcements after 9 April suggests that even with temporary halts to some tariffs, global growth prospects remain similar to the reference forecast due to elevated US-China tariffs and continued uncertainty.

Despite the slowdown, global growth remains above recession levels. The IMF recommends restoring trade policy stability and forging mutually beneficial arrangements to address longstanding gaps in international trading rules. 

Domestic imbalances contribute to uneven growth, with high consumption in the US, weak demand in China, and subdued manufacturing activity in many economies. Addressing these underlying issues could help offset economic risks and close external imbalances whilst building a more inclusive trading system.

Interestingly, the IMF’s inflation forecast has been relatively stable. Emerging and developing markets in Asia, in particular, are expected to see more muted inflationary pressures. Yet this outcome is a likely result of the negative demand shock which tariffed countries are experiencing as export demand diminishes. Furthermore, rising import prices from a trade war could increase already tentative inflationary pressures.

In this vein, the IMF notes that since over 80% of trade invoicing is conducted in US dollars, this projection could be reversed if the USD appreciated. 

Source: IMF

To doubt is to waver

Trade policy uncertainty has become a major impediment to economic growth, with the prolonged elevation of this uncertainty causing investment distortions and market volatility. 

Trade uncertainty, the IMF emphasises, weighs adversely on supply- and demand-side indicators, creating a cycle of negative wealth effects. 

The impact of this trade uncertainty manifests in financial market volatility, supply chain disruptions, and dampened investment.

To mitigate these impacts, the IMF recommends international cooperation through regional and cross-regional groups to sustain global growth and tackle common problems. It suggests that a stable and predictable trade environment could be achieved through pragmatic cooperation and deeper economic integration, including non-discriminatory unilateral reductions of trade barriers or expanded trade at regional, plurilateral, or multilateral levels.

The IMF also cautions against broad subsidies as a response to trade distortions, noting they generate large fiscal costs and additional distortions. While targeted industrial policies may alleviate specific sectoral market failures in certain cases, they should be subjected to a comprehensive cost-benefit analysis and narrowly focused on well-identified market failures to minimise distortions.

Reducing policy-induced uncertainty would at least go some way in working against the bubble of uncertainty which global trade currently doesn’t seem capable of bursting.

“Power hungry”: The impact on commodity markets

The future of commodities markets appears to be characterised by this same increasing volatility and changing dynamics across different sectors, as geopolitics and technology developments prove a double-edged sword: but also pose room for opportunity. 

The report highlights some key metrics influencing their conclusion:

• In energy, oil prices declined 9.7% between August 2024 and March 2025, with further plummets in early April amid escalating trade tensions.
• Natural gas prices rose until March 2025 but reversed course in April, with futures suggesting declining prices through 2030.

• The IMF’s metals price index increased by 11.2% between August 2024 and March 2025, driven mainly by gold, aluminium, and copper.
• Gold prices have repeatedly set new records amid policy and geopolitical uncertainty, hitting $3,500 today.

• The IMF’s food and beverages price index increased by 3.6%, driven by higher beverage prices.
• Coffee prices jumped 33.8%, reaching historic highs due to weather-related supply concerns; on the flip side, rice prices fell 26.0% as crop conditions improved in India and other parts of Asia.

Trade war fears are adding to the “already-bearish outlook” in these markets, and a major structural shift is occurring with AI-related data centres dramatically increasing electricity demand. By 2030, AI-driven global electricity consumption could reach 1,500 TWh, comparable to India’s current total electricity consumption.

The future outlook appears to be one of continued volatility, with balanced risks for energy markets but significant structural changes due to technological developments like AI, which will reshape energy demand patterns and potentially impact all commodity markets through their effects on economic growth and costs.

—

The report comes as many world economies seek to reroute supply chains, creating an environment in which decades-old alliances are being rethought. The IMF report has forecasted relatively more stable economic growth, which fell just 0.3% to 6.2% in 2025; yet US Vice President JD Vance’s recent visit to Indian Prime Minister Narendra Modi has highlighted the paradoxicality of cutting China out while relying on their materials for manufacturing.

This, and similar contradictions, are what has led the IMF to call for “prudence and improved collaboration” across industries and national boundaries. Fiscal authorities face particularly difficult choices amid high debt levels, rising financial costs, and new spending demands, including increased defence expenditure in some regions. 

The IMF highlights that the global economy needs a “clear and predictable trading system, addressing longstanding gaps in international trading rules, including the pervasive use of non-tariff barriers or other trade-distorting measures.” Countries must remain agile to stay afloat.

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The web-based solution, called Global Trade Konnect (GTK), was conceived as a combination of Komgo’s most successful products over the past six years and will function as a full-stack solution for corporates looking to take control of their trade finance operations. 

As international tensions rise and fears of a global recession come closer and closer to reality, companies are rushing to strengthen their risk strategies. Trade finance can play a crucial role in increasing resilience and optimisation – but challenges like information misalignment, inefficiency, and fragmentation can make processes much slower and more complicated than they need to be.

This means having the correct tools to handle internal processes and overcome these challenges is becoming more and more important. Through GTK, Komgo proposes a scalable, smart, and connected solution to simplify daily trade finance operations through digital management. 

GTK is intended as a combination of a series of Komgo products covering all aspects of the trade finance pipeline and its instruments, from standby letters of credit to corporate guarantees and contracts. Capabilities from @Globaltrade, the platform Komgo acquired with GTC, will be combined with the secure communication channel and longtime Komgo staple Konsole APIs, digital document layer Trakk, and AWS’s advanced cloud capabilities.

Through streamlined and secure communication channels, companies will be able to replace emails, paper documents, and wet-ink signatures with a single digital workflow. This will enable them to manage the entire life cycle of thousands of trade instruments all in one place, which will be integrated with a range of communication channels to enable connectivity with all financial institutions. 

Advanced AI integration will drastically increase efficiency, accelerating manual processes by at least 50%. Automatic letter of credit drafting and checking, fee calculation, and bank guarantee issuance will streamline processes, while accurate and timely notifications will make it possible for even non-automated steps to be completed more quickly.

GTK’s reporting capabilities will make it easier to generate operational reports and analytics, and the data it generates will give companies the power to make accurate forecasts and improve their decision-making. 

Through GTK, Komgo has harnessed the power of the most exciting technological advancements – document digitisation, interconnectivity, and AI – to produce a copilot for corporates looking for a way to manage their trade finance activities. In today’s highly fragmented, fast-moving world, companies must be flexible and resilient. GTK promises to bring the best of Komgo to help them navigate this.

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Corporate lending and trade finance are undergoing a transformation – that much, everyone can agree on. Digitisation, AI, and a market that is in constant motion make the industry one of the most exciting sides of finance, ripe with opportunities as much as challenges. 

However, how to overcome these challenges – especially in a complicated geopolitical landscape – and evolve with the opportunities remains a hot topic.

Finastra, a global provider of financial software applications, hosted its annual Europe Corporate Banking Day along with sponsors Microsoft and Tech Mahindra to discuss just that.  In London, senior executives from across the banking, technology and sustainability sectors came together to discuss the key market and technological trends in the industry: here are 5 of their main insights.

​​1. The market is shifting

Institutional investors and private credit are increasingly dominating the market, with growing appetite for direct lending as borrowers seek the best financing options. However, the lending industry still faces many challenges related to transparency, interconnectivity, inefficiencies and balancing regulation with innovation. 

Global political and economic fluctuations are also creating new trade corridors, requiring institutions to be agile and flexible and driving a shift from payables to receivables finance. 

2. Corporates expect seamless services, but digitisation remains a challenge

Corporates demand banking services that are personalised, digital, instant, and both local and global. However, an audience poll identified digitisation as the biggest challenge and opportunity, cited by 44% of institutions. Across the industry, data remains largely in paper form, creating significant barriers. 

Banks must invest in customer-centricity by implementing truly digital customer journeys, straight-through processing and automation and reduce loan approval time. Technologies such as cloud, microservices, APIs, digital ecosystems, and agentic AI will play an important role in banking’s evolution.

3. Industry expertise is declining 

As the next generation enters the workforce, institutions must capture knowledge from experienced workers before they retire, storing it in a structured database. More admin-focused roles must be migrated, upskilled, and digitized to attract younger talent. An audience poll revealed that talent attraction and retention were the biggest challenge and opportunity for almost a quarter of respondents.

4. AI is here to stay

When implemented correctly, AI can augment human capabilities, deliver automation and increase efficiency and speed in ways that would have been unthinkable just a few years ago. Large language models serve as a valuable resource for information, bridging knowledge gaps and facilitating faster decision-making. With AI, institutions can, for example, issue more letters of credit and digital trade agreements and better track, report, and fulfill sustainability commitments. 

AI can speed up document processing, compliance checking, and contract approval times. In the future, we may see autonomous supply chains and transaction processing as well as augmented smart contracts with instant settlement, all thanks to AI’s constant evolution.

5. Tokenisation experiments in trade finance 

Although it has been discussed for many years, banks today are increasingly experimenting with tokenisation. Innovations such as smart contracts and stable and risk coins can drive greater efficiencies in trade settlement and post-trade processing, improve risk management, and provide more effective access to capital. With routers, multiple use cases can be created.

However, despite the opportunities, the lack of industry standards remains a challenge. On the other hand, some argue that standards can stifle innovation and therefore should only be established once market connectivity is achieved.  

The event speakers included leaders from Finastra’s Lending business unit, such as Andrew Bateman, Lekshmi Nair, Robert Downs, Anastasia McAlpine, Sandrine Markham, Elena Sankova and Julian Lee. Other speakers represented institutions such as Microsoft, Tech Mahindra, ING, Loan Market Association, ITFA, Crédit Agricole CIB, Norddeutsche Landesbank Girozentrale and CredAble.

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