India-U.K. goods trade surged 60% in eight years; imports nearly doubled, Pg15

• India-U.K. total trade hit $19.3 billion in 2024-25, up nearly 60% from $12.2 billion in 2016-17.

• Exports rose 41% to $12 billion; imports doubled to $7.3 billion over the same period.

• Top export categories: Electrical machinery (15.3%), Nuclear reactors/boilers (11.6%), Mineral fuels (9.1%), Pearls/stones (7%), Pharma (5.4%).

• Top import categories: Precious stones (30.5%), Boilers/N-reactors (17.4%), Electrical machinery (7.2%), Iron/steel (5%), Aluminium (4.5%).

• Engineering exports projected to hit $7.55 billion by 2029-30 post-FTA.

• Trade Imbalance: Although exports are growing, imports have grown faster, reducing India’s trade surplus with U.K. from $4.9B (2016-17) to $4.7B (2024-25).

• FTA Influence: The recently signed Free Trade Agreement (FTA) is expected to:

• Boost engineering exports

• Enhance market access

• Strengthen supply chain integration between both nations

• Sectoral Concentration:

• 65% of imports and nearly 50% of exports concentrated in five major product categories

• Highlights limited product diversification in India-U.K. trade basket

• India’s Positioning: U.K. now India’s 6th largest engineering export destination, further expected to rise.

• Free Trade Agreement (FTA): Pact reducing tariff and non-tariff barriers to enhance bilateral trade.

• Trade Surplus/Deficit: The difference between a country’s exports and imports; positive value indicates surplus.

• Product Concentration Ratio: Proportion of total trade accounted for by a few product categories, impacting trade resilience.

• Reflects deepening India-U.K. economic integration post-Brexit.

• Signals export opportunities for India in high-tech and engineering sectors.

• Highlights vulnerability due to import dependency on critical goods like minerals and electronics.

• FTA expected to drive mutual growth, especially in MSME-driven sectors like engineering goods.

Mains Mock Question:

Analyse the impact of India's Free Trade Agreement with the U.K. on the bilateral trade trajectory. What are the opportunities and concerns for India's export-driven sectors under this framework?