India has been talking about free trade agreements with several partners including Australia, the United States, the United Kingdom, and the United Arab Emirates – both bilateral and regional over the past two years in a bid to boost export-oriented domestic manufacturing. India’s total exports increased to US$ 347 billion in 2021 (till Nov data) as compared to US$ 263 billion reported in 2020. While India hopes to conclude trade agreements with Australia, the US, UAE and the UK by as early as 2022; a growing list of countries negotiating trade deals with India includes Russia, Oman, Canada, the GCC, and the Southern African Customs Union.
India wants the ASEAN countries to lower market restrictions in the agriculture and automotive sectors as well as reciprocate its own FTA concessions. These concerns made India walk away from the Regional Comprehensive Economic Partnership (RCEP) in November 2019. In the following sections, we spotlight developments in India’s trade engagements with the countries and analyze data of India’s bilateral trade.
India-Australia Comprehensive Economic Cooperation Agreement (CECA)
India and Australia are soon expected to complete negotiations for an interim FTA that will officially be called the India-Australia Comprehensive Economic Cooperation Agreement (CECA). The Indian government has confirmed that sensitive dairy and agricultural products will be kept out of the trade deal and will focus on items not produced in the country.
India’s export basket to Australia majorly comprises goods like petroleum products, medicines, polished diamonds, gold jewellery, apparel etc., while key Australian exports to India include coal, LNG, aluminium, and non-monetary gold. According to our database, India has a trade deficit with Australia as India’s imports from Australia are more than exports to the country. Here is India’s bilateral trade with Australia in the last 5 years.
Read More: Amid China Trade Restriction, Australia Expands Coal Export Market in India & Japan
India to Export Mangoes to U.S. and Import US Pork and Other Agricultural Products
In January 2022, India and the United States agreed on boosting their bilateral trade relations. India announced to import alfalfa hay, cherries, and pork & pork products from the U.S. And the United States approved the import of mangoes and pomegranates from India. The U.S. market preference for Indian mangoes is well known. Indian mango exports to the US amounted to 800 metric tons (MTs) in 2017-18, worth US$2.75 million.
The next year, 2018-19, saw India export 951 MT of mangoes, worth US$3.63 million. In 2019-20, Indian mango exports to the US were 1,095 MT, worth US$4.35 million. In 2020, exports came to a halt as USDA officials could not visit India to inspect irradiation facilities due to COVID-19 travel restrictions.
India enjoys a trade surplus with the United States as the country’s exporters are more than imports. In 2021, India’s imports from and exports to the U.S. rose as compared to the previous years. Here is a bilateral trade of India with the US reported in the last 5 years.
India-UK FTA Negotiations Formally Launched
India-UK FTA negotiations formally launched on January 13, 2022, during the UK International Trade Secretary Anne-Marie Trevelyan’s two-day visit to India for the 15th UK-India Joint Economic and Trade Committee (JETCO).
The United Kingdom is particularly keen on India reducing its import duties on Scotch Whiskey and cars, which is currently around 150% and 125% respectively. In May 2021, an Enhanced Trade Partnership (ETP) was established between the two countries – reflecting unusually rapid progress in bilateral trade talks. The 15th UK-India JETCO in January 2022 reviewed the progress made within the UK-India ETP.
India’s major exports to the UK are articles of jewellery & parts, turbo-jets, medium oils & preparations, and parts of aeroplanes. India’s top imports from the UK are silver, gold, waste & scrap, turbo-jets, waste & scrap of iron & steel, and petroleum coke. Like with the U.S., India also experiences a trade surplus with the United Kingdom as well. India reported an increase in the value of imports & exports with the UK in 2021. Take an update on India’s bilateral trade with the UK in the last five years.
India-UAE to Boost Bilateral Trade to the Next Level with CEPA
As of now India and the UAE representatives are working on finalizing the larger CEPA agreement that will include investment protection measures and special facilities for Indian labour and expatriates; the goal is to complete this by March 2022. Earlier a partial FTA was to be signed on Modi’s planned visit to the UAE on January 6, 2022, but this was postponed due to a surge in Omicron/Covid-19 outbreaks.
The UAE is India’s third-largest export destination and India is seeking duty-free market access on a whole range of products, such as gems and jewellery, textiles and garments, engineering goods, etc. Major Indian exports to the UAE are refined petroleum products, minerals, cereals, sugar, fruits, vegetables, tea, meat, seafood, textiles, engineering, machinery products, and chemicals. Major Indian imports from the UAE are petroleum and petroleum products, precious metals, stones, gems and jewellery, minerals, chemicals, and wood and wood products.
For the last three consecutive years, India has been experiencing a trade deficit with the United Arab Emirates, which is why both the countries are working on a trade agreement for growing their bilateral trade relations. Check India’s bilateral trade with UAE in the last five years.
Read More: World’s Biggest Trade Deal Will Improve The Trade Practices
India’s Trade Agreements with Other Countries
Besides Australia, the United States, the United Kingdom and the United Arab Emirates, India is getting into trade agreements also with Russia, Oman, Canada, the GCC, and the Southern African Customs Union in 2022.
- During President Vladimir Putin’s official visit to India on December 6, 2021, India signed MoUs with Russia covering nearly 30 sectors, including trade, energy, steel, fertilizers, science & technology, intellectual property, outer space, geological exploration, cultural exchange, and education.
- India is on trade talks with Canada and sector of interest for Canadian companies include education, transportation infrastructure, life science, clean energy technology (integration of renewable energy/smart grid; carbon capture, use, and storage; and energy efficiency) and renewable energy, infrastructure development, natural resources, defense and security, value-added food products, mining, and oil and gas, etc.
- India and Israel trade talks are ongoing with closer military and technology partnerships and deal is likely to be signed by mid-2022.
- India-European Union FTA negotiations in goods and services are on the track after the Danish Prime Minister Mette Frederikson visit to India.
- India-South African Customs Union preferential trade agreement talks are ongoing.
- India-Oman trade and investment seek further boost as both the nations are working on a deal.
Since the Covid-19 outbreak from China’s territory and the official complaints made by many countries including Australia and the U.S. to WTO, India has restricted trade with China and sought to boost bilateral trade relations with other countries. India is pushing for more FTAs with multiple countries and regional blocs in 2022.
