India-UK trade deal to boost chemical exports, manufacturing
What's the story
The free trade agreement (FTA) between India and the UK will significantly boost India's chemical exports and domestic manufacturing, according to the chemical exporters' body CHEMEXCIL. Under the deal, over 1,000 product categories from the chemicals sector will get zero-duty access to the UK market. These include organic chemicals, agrochemicals, cosmetics, toiletries, essential oils, specialty chemicals, and petrochemicals.
Sector impact
Deal makes chemicals sector one of biggest beneficiaries
The chemical sector plays a major role in the trade agreement, accounting for 12.4% of the total tariff lines. CHEMEXCIL Chairman Satish Wagh said this makes it one of the biggest beneficiaries of this deal. He also noted that India's current chemical exports to the UK stand at $570.32 million, which is about 2% of India's global chemical exports.
Growth potential
FTA paves way for exponential growth
Wagh said the FTA paves the way for exponential growth, with a 30-40% surge in exports expected. This could take India's chemical exports to the UK to between $650 million and $750 million by 2025-26. He attributed this potential growth to tariff elimination, improved competitiveness, and easier market access for Indian exporters.
Market penetration
India's share in UK's import basket is only $570 million
Despite exporting nearly $30 billion worth of chemicals globally, India's share in the UK's import basket is only $570 million. This shows a huge untapped potential. The FTA will help Indian exporters penetrate deeper into the UK market by lowering cost barriers and increasing visibility. It will also promote supply chain collaboration, enable technology transfer/joint ventures, and enhance regulatory cooperation for smoother trade flows.