Britain occupies fourth position in Indias total trade after the US, EU and Japan. Britain was the most important trade ally in the early years after Indias independence. In 1960-61 total bilateral trade was Rs 390 crore but rose to Rs 14,610 crore in 1996-97.In 1997-98 (April-October) bilateral trade rose to Rs 9329 crore ( Rs 8408 crore), up 11 per cent.
Nearly fifty years later,Britains share in the total trade fell from nearly 22.1 per cent in 1960-61 to a mere 5.7 per cent in 1996-97. The fall in share was sharper during the 1990s. In 1997-98 ( April-October), the share of Britain in Indias total trade has edged up to 6.1 per cent from 6.0 per cent.
In fact the share has risen from 5.9 per cent in 1994-95. By 2000, bilateral trade is slated to go up to Rs 30,000 crore, requiring about 35 per cent annual growth in the the next three years.
Therefore a rise of nearly 153 per cent in Indo-British trade from Rs 5,769 crore in 1991-92 to Rs 14,610 crore in 1996-97 augurs well for both countries. It is more than a symbolic gesture of the old ties strengthening in the new economic liberalisation. It means Britain is keen on promotion of mutual economic relations and would like to participate in a big way in Indias growth experiment. This it seeks to do by entering infrastructure. It is second major investor in India after the US.
Indo-UK trade grew by 7.2 per cent (27 per cent) in exports terms and nearly 15.4 per cent (31 per cent) in imports from UK in 1996-97.
The share of exports to UK was nearly six per cent of Indias total exports and five per cent of its imports in 1996-97. In 1997-98 ( April-October) the share of Indias exports to Britain improved to 6.6 per cent, while that of imports to 5.7 per cent.It was as high as 27 per cent in exports and 19 per cent in imports in 1960-61.
What has really caused such a drastic fall in share? The probable reasons are the changing structure of commodity basket in Indias trade, the emergence of other nations such as the US, Germany, Japan and other EU countries,Britains weakening as an economic power in Europe and its limited capacity to cater for demand for diverse goods and services required by India. In the meanwhile sterling has weakened as a world currency with the rise of dollarisation of world trade. Other reasons cited may vary from falling quality of goods, the composition of export basket or even to the emergence of trade blocks such as the EU or the ASEAN.
EU is Indias main trading partner that absorbs more than a quarter of Indias exports and supplies approximately the same proportion of Indias imports.
Among the EU countries UK accounts for nearly 22 per cent of EUs trade with India. India exports textiles and garments, handlooms and carpets, leather goods and footwear, agro marine products, gems & jewellery, dyes & chemicals, metals etc to the UK. Whereas capital goods (14 per cent) and gems and jewellery (25 per cent) account for a major chunk of total imports from Britain. It imports machinery & equipment, chemicals, fertilisers, paper, metals & metal manufacturers, pearls, precious stones and projects goods etc.
Recently Micheal Bates, Deputy High Commissioner, in a meeting with members of Gujarat Chamber of Commerce and Industry has carved a rosy picture of the trade relations stating that in the last five years the bilateral trade grew by 82 per cent from Rs 10,880 crore to Rs 19,800 crore.
The high powered delegation scheduled to visit India in February 1998 is looked upon as a good opportunity in boosting trade further.Ever since India opened up its economy in the nineties, British businessmen have been visiting this country in search of opportunities for mutual economic benefits.
Nearly 600 new Indo-British joint ventures were formed in the past three years. It is estimated that 200 new collaborations and joint ventures would be set up every year in India in future. Already big companies like Rolls Royce, GEC, BAT, Cadburys and Unilever have established their brand names in the country.
Three key sectors namely telecommunications, financial services and consumer goods are considered to be the sectors with good potential.
Opening up of insurance sector may also promote high investment opportunity and strengthen the relationship between the two countries.
