Analysis of UK-India Economic Ties

The provided document is a detailed analysis of UK-India economic ties, including trends in goods exports and services exports from India to the UK. The report highlights the significance of the UK as a trading partner for India, with a focus on the impact of Brexit on their economic relationship. It also examines the role of industry associations in integrating political, bureaucratic, industrial, and health systems in India and South Africa. Furthermore, the document discusses the emergence of China and India in the global market and the prospects of India as a partner in triangular development cooperation with the UK.

KOLM13BSS - CW 1
ASSESSMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
Background ...............................................................................................................................3
Research Questions ....................................................................................................................3
Research methods .......................................................................................................................3
ACADEMIC LITERATURE .........................................................................................................3
Trade and Development UK and India ......................................................................................3
RECOMMENDATION ..................................................................................................................9
CONCLUSION ...............................................................................................................................9
REFERENCES .............................................................................................................................11

INTRODUCTION
Background
Trade refers to a practice of buying and selling goods and services from one country to
another. It assists in economic development of the country as its result into import and export for
the countries. In this study, UK and India will be undertaken as one is developed country and
other is developing country. It will provide understanding about the trade relationship between
UK and India and their impact on the economic development of the countries. Trade affects the
development of country. There are various benefits of International trade which help the
economic growth of the country. Moreover, the assignment will provide recommendation for
improving the trade and development for maintaining the economic relation between the
countries.
Research Questions
 What are trade relationship between UK and India?
 How the trade relation of these countries have their impact on economic development?
 How the economic development of country is affected while conducting international
trade?
Research methods
The research methods are the ways on the basis of which the study is conducted. It will
include the Qualitative research in which it will provide the views and opinion of the various
authors regarding the study. Moreover, the data collection methods will include secondary data
in which will collect the information regarding the topic from the books, journals, Internet
sources etc. to have better understanding about the trade and development.
ACADEMIC LITERATURE
Trade and Development UK and India
According to the views of Graham, Hjorth and Lehdonvirta (2017), The Economic
relationship between UK and India are growing which assist in the economic development of the
countries that assist in reducing unemployment and poverty within the nations. There are many
bilateral trade agreement between these two countries which assist in the growth and
development of the economy. From year 2000, there have been increase in trade of goods and
services between India and UK. The Export of goods and services from UK are increasing to
India. Moreover, In 2016, Export to India was accounted for 1.0% of the UK export market. On

the Critical Note Paul and Mas (2016) stated that, Indian Exports to the UK were accounted for
£9.6 billion in 2016 which is 1.6% of UK imports. Moreover, It shows that UK exports
accounted for 15.6 billion in 2016 whereas Indian exports to UK accounted for 9.6 billion which
state that UK exports are more than that of India which is beneficial for the economic
development of UK.
In the Views of Bhardwaj (2017), The Goods exported from UK to India consisted of
Pearls, precious stones, metals, coins etc. Moreover, there have been increase in the technology
and engineering focused sectors which consist of boilers, nuclear reactors etc. The most growing
sectors which are increasing their exports to India consist of pharmaceutical and Beverages. This
exports of goods have assisted in the growth of the beverage industry which is beneficial for the
economic development of UK. India Imports more Pharmaceuticals products which has grown
strongly and UK is the global leader in these sectors which means there are future chances of
increasing the UK and India trade relation due to this sector. However on the critical note
Hettige and Gerharz (2015), stated that, There is increase in the exports of India to UK for
Illustration 1: UK Export to India
( Source : UK EXPORTS TO INDIA, 2016)

various goods which consist of vehicles, organic chemicals and Pharmaceutical products.
Moreover, the Indian exports are increasing due to low cost and the high quality provided by the
Indian Exporters. Moreover, India's manufacturing sector is growing tremendously which has
increased the demand for the products of made in India for the UK and thus there are various
products which are being exported to UK. It provides the products such as Apparel, footwear and
electronic equipments.
As per the views of Wagner and Horth (2019), UK is providing services in India which
accounted for around £2 billion in 2016. It is identified that UK is the largest services provider
in the world. The services export which are been increasing consist of Tech- focused services
such as telecommunication, computer and information services. Moreover, There have been
increase in insurance and financial services. Moreover, the visitors from India which visit to UK
are increasing due to which there have been rise in spending power of those visitors and thus the
travel services are growing which assist in increasing the revenue of this industry in UK that
assist in enhancing the economic growth of the country and rising GDP which is beneficial for
Illustration 2: India goods exports to UK
( Source : TRENDS IN GOODS EXPORTS - INDIA TO THE UK , 2016

the economic development of this country. On the Contrary Papaioannou and et.al. (2018) stated
that, There have been growing demand for the services in the UK market. The information and
communication sectors accounted for largest growth rising of £5.1 billion. The business service
sector of India shows the 65% of global service exports. This will assist in the future growth in
India's exports to UK. The digital technology enhancement will assist India in growing the
services export to UK through which it will be able to provide exported services in tele-
medicine, tele- surgery etc.
In the views of Nerini and et.al. (2018), International trade assist the countries in
increasing their per capita income which help in the overall growth and development of the
economy. UK exports to India assist in building the economic relation between the counties
which is beneficial for both the counties as it will help in increasing trade between this two
countries and leads to the growth and development of the countries. International trade assist
increasing the balance of trade for the country which help in the economic development of
country. The UK trade relation with India are growing and becoming stronger which is beneficial
for the economic growth and development of country. Increase in trade between the counties
assist in reducing the poverty and create various employment opportunities by development of
Illustration 3: India 's services export to UK
( Source : INDIAN SERVICES EXPORTS TO THE UK , 2016)

the economy. On the Contrary Verick (2018) stated that, International trade between the
counties are growing but also there have been increase in the imposition of taxes on the various
imports and exports of the goods and services due to which the cost of goods and services
increases. With the increase in the trade relation between the countries will help in the economic
development of the countries. India is developing country and require more growth and
economic development for this development of the county which can be achieved by maintaining
international trade as it will assist in increasing the per capita income for the country.
In the views of Chen and et.al. (2018), Foreign direct investment is the way of entering
the business in the another country by the firm based in one country. It is stated that UK is the
largest investors in the India with FDI. UK trade and investment consider that Indian companies
created 127 FDI projects In UK. Indian companies have created 110000 jobs in UK which is
beneficial for the growth and development of the Indian economy As it will assist in increasing
the foreign direct investment of India. The economic relations between the two nations in
becoming stronger as the large number of people of Indian are residing in UK which assist in
building good relation with the nation. Critically Ohlan (2017) stated that, UK is investing in
Indian companies as it is the developing country and it has grown tremendously which is
beneficial for the growth of the companies which have entered in the Indian market and also for
the economic development of the country. Foreign direct investment assist in the development
of the economy and increasing the revenue for the sectors which is beneficial for economic
development of the country. India is the third largest investor in UK while UK rank as 18th
trading partner of India.
As per the Article "The prospects of UK-India economic ties" which provided
information about the UK and India trade relationship which have their impact on the economic
development of the countries. It states that UK and India current trading relationship is strong
but there are chances of increasing this trade relations in the future. Moreover, India and UK
have strong Bilateral investment partnership. UK is the largest investors of India since 2000. The
improvement in operating environment of India will assist in enhancing foreign direct
investment. There are four areas which are been identified by the UK businesses that will
provide great benefit to the Indian economy. These areas include the reduction of corporate tax,
smooth and fair implementation of GST. Simple and fair tax regime, clarity in areas of

government expenditure. The bilateral trade grew by 170% between 2004 and 2014. The UK-
India economic partnership will assist in boosting direct trade.
As per the article "India - UK trade not affected by Brexit" state that the trade relation
between the two countries will not be affected after the Impact of Brexit. Bilateral trade
agreement between Britain and UK stands at USD 25 billion and thus India is an Important
trading partner for Britain. It also states that the trade agreement between the two country are
growing which is beneficial for the both countries and thus will not be affected after the Brexit as
they have strong economic relations. Imports to India accounts for USD 13 billion and export
from India account for USD 12 billion. On the Contrary Article "Should India be worried about
Brexit?" stated about the impact of Brexit on the trade relationship between UK and India. There
are many Indian companies which have invested in UK which will be affected by No- Deal
Brexit as it will lead to people to lose their jobs due to Brexit. This have a great impact on the
Indian Economy as well as the UK economy. The Brexit will have a negative impact on the UK
economy because it will lead to reduction in the economic development of the counties as there
will be increase in the Unemployment and many people will lose their jobs after the Brexit. The
Indian economy will be affected as it will lead to reduction in the exports to UK due to Brexit as
there will be situation of recession and thus the firms existing in UK will have to face various
problems. In 2016, there were 800 companies operating their business in UK which created job
opportunities in UK which accounted for 110000.
According to Faúndez (2016), UK Department of International Trade recorded India as
source country for 140 FDI projects. There are healthy trade relations between the countries
which is beneficial for the economic development of the countries. Indian economy is growing
tremendously which is impressive and attractive many counties to have foreign direct investment
in this country as it is beneficial for the other counties as well as for India. The Indian economy
requires more foreign capital investment for their economic development. In 2016, India
established around 127 new investment projects in UK which assist in creating more
employment opportunities. On the contrary Mundy and et.al. (2016), There are various bilateral
trade agreements between these two countries for example Joint economic and trade committee
(JETCO), in 2005 that aims at boosting two ways bilateral investment. India is the fastest
growing economy in the world with the formulation of various polices which are being
implemented for improving country's business conditions. It is identified that the countries will

have a economic development if their exports are more than that of imports as increase in exports
will lead to increase in foreign exchange for the country which will assist in increasing the per
capita income for the country and thus will lead to economic development of the country. If the
country have more exports than its imports it increases their balance of trade which assist in
increasing the revenue for the country and enhancing the GDP of the country. On The Contrary
(Paulo, 2018) stated that, The UK and India trade relation are becoming stronger as there have
been increase in the Bilateral trade agreement between these countries which is beneficial for the
growth and economic development of the countries. There have been increase in the import and
export for the goods and services between these counties which have help the economies in their
growth and development and creating various job opportunities and reducing the poverty from
the countries. The Economic development of the country is affected by the trade relation with
the countries because of the countries have good economic and trade relation than it will lead to
countries towards growth and development.
RECOMMENDATION
Trade is the only aspect of UK- India Bilateral economic relations. The UK and Indian
economy can prosper by developing more trade agreement which will assist in the economic
development of the both the countries. The UK-India trade agreement will boost trade by
lowering the tariff. The Joint Trade review undertaken by UK and Indian government will assist
in developing trade deals after the UK leaves EU. There is requirement of bilateral economic
architecture which consist of UK- India CEO forum, Joint economic and trade committee etc. To
improve Bilateral trade it is recommended that there should be close involvement and
consultation with UK and Indian businesses which assist in increasing Import and export
between UK and India. It is recommended to develop UK department of International Trade
export opportunities programme which assist in identifying the opportunities for UK in India and
the same should be developed in India to identify the opportunities in UK. It should develop free
trade agreement between the countries which will assist in development of the economy and
building close relations with the country.
CONCLUSION
From the above assignment it has concluded that UK- India have strong trade relations
which are beneficial for the economic growth and development of the country. It articulated
about import and exports between India and UK. Moreover, it has covered the aspect of Brexit

which will have its influence on the trade relationship between UK and India. Moreover, It has
provided information about Bilateral trade agreement between UK and India and their impact on
the economic development of the countries. It has identified that the countries exports assist in
increasing the per capita income for the country. It has shown about trend of service export
between India and UK. There are various barriers to trade which include High tariff on the
imports and export of Goods and services.

REFERENCES
Books and journal
Bhardwaj, M., 2017. India UK Bilateral Trade: Trends, Patterns and Prospects.
Chen, B. and et.al., 2018. Global energy flows embodied in international trade: A combination of
environmentally extended input–output analysis and complex network analysis. Applied
energy. 210. pp.98-107.
Faúndez, J. ed., 2016. Good government and law: Legal and institutional reform in developing
countries. Springer.
Graham, M., Hjorth, I. and Lehdonvirta, V., 2017. Digital labour and development: impacts of
global digital labour platforms and the gig economy on worker livelihoods. Transfer:
European Review of Labour and Research. 23(2). pp.135-162.
Hettige, S. and Gerharz, E. eds., 2015. Governance, Conflict and Development in South Asia:
Perspectives from India, Nepal and Sri Lanka (Vol. 6). SAGE Publishing India.
Mundy, K. and et.al., 2016. Handbook of global education policy. John Wiley & Sons.
Nerini, F.F. and et.al., 2018. Mapping synergies and trade-offs between energy and the
Sustainable Development Goals. Nature Energy. 3(1). p.10.
Ohlan, R., 2017. The relationship between tourism, financial development and economic growth
in India. Future Business Journal. 3(1). pp.9-22.
Papaioannou, T. and et.al., 2018. Politics of innovation and development: The role of industry
associations in integrating political, bureaucratic, industrial and health systems in India
and South Africa. Development Policy Review. 36. pp.O531-O551.
Paul, J. and Mas, E., 2016. The emergence of China and India in the global market. Journal of
East-West Business. 22(1). pp.28-50.
Paulo, S.E.B.A.S.T.I.A.N., 2018. India as a partner in triangular development cooperation:
Prospects for the India-UK partnership for global development. Observer Research
Foundation Working Paper.
Verick, S., 2018. Female labor force participation and development. IZA World of Labor.
Wagner, B. and Horth, S., 2019. Digital technologies, human rights and global trade? Expanding
export controls of surveillance technologies in Europe, China and India. In Research
Handbook on Human Rights and Digital Technology. Edward Elgar Publishing.
Online

UK EXPORTS TO INDIA. 2016. [Online]. Available through :<https://www.ukibc.com>
India-UK trade not to be affected by Brexit. 2019. [Online]. Available through
:<https://economictimes.indiatimes.com>
INDIAN SERVICES EXPORTS TO THE UK. 2016. [Online]. Available through
:<https://www.ukibc.com/>
Should India be worried about Brexit?. 2019. [Online]. Available through
:<https://economictimes.indiatimes.com/>
The prospects of UK-India economic ties. 2017. [Online]. Available through
:<https://www.livemint.com>
TRENDS IN GOODS EXPORTS - INDIA TO THE UK. 2016. [Online]. Available
through :<https://www.ukibc.com>