Table 2: Opportunity for Indian companies in UK
Table 3: Policy Initiatives to Increase India-UK Trade
Table 4: Trade in goods
Table 5 Top 10 British imports from India
Table 6: Top 10 British exports to India
Table 7: UK Imports from India and growth rate
Table 8: UK Export to India and growth rate
Table 9: Bilateral trade in goods
Table 10: Total Bilateral trade(Goods and service)
With the emerging economies at the helm of affairs, it’s high time that India UK increases bilateral trade to a considerable level. The issue is especially significant as volume of trade between thetwo countries is much lesser than the UK-China trade.The context becomes even more important as business community in both the nations have always maintained that current level of trade is an underutilization of the potential.
The areas where India UK can substantially increase their cooperation is Energy, Higher and Vocational Education, Biotechnology, Healthcare, Information Technology and Food Processing, manufacturing, Automobiles and Infrastructure, to achieve the target of taking the bilateral trade in goods to double by 2015.
The bilateral Trade in goods has increased steadily over the past five years, barring a slight dip in 2009-10. The total trade between India and UK stood at GBP 8bn in 2005 and has gone up to around GBP 12 bn.The only year when trade went down was in 2009-10 when both goods and services trade fell down making the total trade dropping to GBP 10.8 bn.
In recent years, the Indian companies have made huge investments in the UK and are now a major investor in the UK. The Tata Group is now the largest manufacturing employer in UK. More than 150 Indian companies have invested in the IT sector in UK. Indian companies employ a large chunk of people in the UK. UK being the world’s sixth largest manufacturer, a hub for science & innovation and gateway to EU remains a very important destination for Indian companies.
Despite the growing relations between the two countries, the level of Investment by UK in India is far below the actual potential.The reasons being cited for underdevelopment of these are India’s strict regulations, complex approvals,taxation,IPR issues,fund raising and expatriate issues like obtaining business visa.Indian companies in UK also want similar flexibility in terms of government regulations,business visa,taxes and labour costs.
Policy initiatives like India-EU FTA and India’s opening up of Insurance & Defence sector is likely to fuel up the bilateral trade & Investment. UK companies can tap Indian automobiles, energy, Food processing, Education, Manufacturing, Infrastructure, Healthcare and Biotechnology sectors. Indian companies can expand their foothold in UK in many areas like Automobiles, Education, Healthcare, Infrastructure and Information Technology. So there are enough avenues for collaboration and so there is a huge untapped potential.
Though India-UK relations spanning several decades have intensified, yet there is much more scope for the expansion in trade relations. India and UK have to adopt tangible measures to increase the low bilateral trade in goods and services (£13bn in 2010) and breathe new life into the trading equation.
Despite other contenders on the horizon, India would like to expand trade with the UK. The trade figure of UK-US and UK-China indicate the future potential for Indo-UK trade. There is no reason why India cannot become as big a trade partner of the UK as US and China.
So Indo-UK trade is likely to go up in the years. However for the trade to exploit the untapped potential, it is required that both the government and the industry should explore all possible ways to enhance the trade volume and all impediments to the trade should be removed to unleash the true potential of trade between the two countries.