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Exports

India-UK Free Trade Agreement to Boost Chemical Exports

Strategic Insights

— 1 min read

The free trade agreement (FTA) between India and the UK is expected to boost the country's chemical exports as more than 1,000 tariff lines from the chemicals sector are granted zero-duty access to the UK market. This, according to the Chemicals Exporters Body CHEMEXCIL, will help increase India's chemical exports to the UK, which currently stand at $570.32 million. The FTA aims to eliminate tariffs, improve competitiveness, and ease market entry for Indian exporters, leading to a potential surge of 30-40 per cent in exports, reaching $650-750 million in 2025-26.

Key Takeaways:

  • The India-UK FTA grants zero-duty access to more than 1,000 tariff lines from the chemicals sector, including key product categories such as organic chemicals, agrochemicals, cosmetics toiletries, essential oil, speciality chemicals, and petrochemicals.
  • The chemical sector is among the largest beneficiaries of the agreement, contributing 12.4 per cent to the total trade agreement tariff lines, and strengthening its position in trade policy and classification.
  • India's current chemical exports to the UK stand at $570.32 million, with a significant untapped potential of $30-40 billion, given the UK's imports of chemicals worth $35.11 billion.
  • The FTA will enable Indian exporters to penetrate deeper into the UK market with reduced cost barriers and enhanced visibility, and promote supply chain collaboration, technology transfer, and joint ventures.
  • The agreement will enhance regulatory cooperation for smoother trade flows and offer new opportunities to expand market reach, boost exports, and deepen bilateral trade relations with a high-potential market like the United Kingdom.

Statistics:

  • India's chemical exports to the UK: $570.32 million (2022-23)
  • Potential growth in chemical exports to the UK: 30-40 per cent
  • Expected revenue from chemical exports to the UK in 2025-26: $650-750 million
  • UK's imports of chemicals: $35.11 billion
  • India's share in the UK's import basket of chemicals: $570 million (only 1.6 per cent)
  • Number of tariff lines granted zero-duty access to the UK market: over 1,000
  • Contribution of the chemical sector to the total trade agreement tariff lines: 12.4 per cent
  • India's global chemical exports: over $30 billion

Sources:

  • Satish Wagh, Chairman of CHEMEXCIL (Basic Chemicals, Cosmetics and Dyes Export Promotion Council)
  • Contify.com
  • CHEMEXCIL

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