UK-India trade relations in decline
As Prime Minister David Cameron prepares to roll out Britain’s new special relationship with India, the first task of the two countries must be to stem a sudden and sharp decline in trade and investment due to the global recession, analysts and business leaders say.world Updated: Jul 02, 2010 00:08 IST
As Prime Minister David Cameron prepares to roll out Britain’s new special relationship with India, the first task of the two countries must be to stem a sudden and sharp decline in trade and investment due to the global recession, analysts and business leaders say.
Cameron is due to visit India on July 28-29 in what is likely to be his first overseas destination on a bilateral mission.
Now, business leaders are keen to see a rapid scaling up of trade and investment ties with some big ticket British projects — game changers that they say will put flesh on Cameron’s promised “enhanced partnership” with India.
According to the latest Indian figures made available to Hindustan Times, trade between the two countries grew in 2008-09 by 7.4 per cent to $12.5 billion — a modest rise compared to the nearly 19 per cent growth a year earlier. A fall in demand saw India’s exports to Britain in 2008-09 decline 0.83% — from $6.7 billion to $6.6. But British imports to India, relatively unscathed by the global downturn, increased by a massive 18.5%, causing the balance of trade to fall sharply from $1.7 billion in India’s favour to $777 million.
However, it is British investments that is causing Indian business leaders most worry.
While Indian businesses are the second largest investors in London after the US, British investments fell nearly 27% from $1.176 billion in 2007-08 to $864 million in 2008-09.
“What has happened is because of the global downturn,” Commerce Minister Anand Sharma, who was leading a CII business delegation to Britain, told HT.
There’s more bad news: according to preliminary Indian figures, India’s exports to Britain registered a negative growth of -1.15 % in Apr-Feb 2009-2010 over the same period a year ago.