It will continue to hold this position till 2030, as it builds civil infrastructure, bolstering demand for overseas goods, according to HSBC's latest Trade Forecast report.
The report, which has a special focus on infrastructure, finds growing Asian economies will take an increasing share of infrastructure-related imports over time, with Malaysia, Korea and Vietnam moving up the rankings.
Excluding the USA, Mexico is the highest ranking non-Asian importer of total infrastructure goods, ahead of Brazil.
Shifting Infrastructure Demand
The USA is currently the biggest importer of infrastructure-related goods across these sub-sectors, but the report predicts that by 2020 India will become the lead importer of goods for infrastructure as it invests in building its domestic networks and will remain at the top of the charts by 2030.
China is set to become the top importer of investment equipment (machinery required by businesses to boost production) by 2030 as it continues to invest in manufacturing productivity.
The report indicates that trade in investment equipment will increase more rapidly than trade in goods for infrastructure in the years to 2030, in part due to the pivot in China's economic focus towards consumer led growth and next generation technology.
Asia is forecast to see the most rapid growth in merchandise trade in the decade to 2030 led by India, China and Vietnam at an average of more than 10pc a year.
Yet advanced European economies - such as the UK, France and Germany - are also forecast to expand their exports of goods at rates of 4-5pc a year on average over this period, while average growth in US goods exports will be closer to 6pc .
Global Trade Trends
Between 2013 and 2030, infrastructure-related global trade will grow at an average of 9pc annually, compared to GDP growth of an average of just below 4pc and world merchandise trade at an average of 4.5pc , the report says.
This means that by 2030, infrastructure-related goods will be the most commonly traded, increasing in market share from 45pc of total goods exports in 2013 to 54pc by 2030.
International businesses around the world are reporting increased confidence in global trade prospects with the HSBC Trade Confidence Index rising to 112, up one point.
The Forecast meanwhile predicts that world trade will grow at a modest pace to 2015 before then accelerating between 2016 and 2020.
According to the report, even as economies develop and become wealthier, their demand for infrastructure products remains strong.
It outlines how advanced economies like the USA, the UK and Germany will need to continue investing in infrastructure to maintain their competitive advantage in supplying investment goods to the rest of the world.
Sandeep Uppal, Managing Director and Head, Commercial Banking, HSBC India said: "Rising middle classes across Asia's rapidly emerging markets, especially India and China, will drive significant infrastructure demand in the region.
"Aspirations of the new middle class and rapid urbanisation will force India to upgrade its civil infrastructure, thus pushing up demand for overseas infrastructure related goods."
--IBNS (Posted on 10-10-2013)