The UK could increase its exports to India by an extra USD 3.2 billion as a non-member of the European Union, according to a new study released here today.
India represents “sizeable growth” opportunities for Britain as part of a wider analysis of the trade potential offered by seven emerging (E7) economies of the world Bangladesh, China, India, Indonesia, Nigeria, Pakistan and Vietnam, the ‘G7 to E7: The Standard Chartered Trade Performance Index’ finds.
“Like all G7 countries, the UK would significantly benefit from focusing on China, but it also faces a sizeable opportunity to capitalise on its current relations with India. UK businesses missed projections by USD 4.6 billion with China and USD 3.6 billion with India,” the study notes.
Under a “Notional Post-Brexit Exports” analysis, the research highlights that Britain’s current exports to India stand at USD 5.5 billion, which are predicted to be USD 9.1 billion if Britain remains a member of the European Union (EU) but USD 12.3 billion as a non-member of the economic bloc. Therefore, Britain’s “increased export opportunity” outside the EU with India stands at USD 3.2 billion.
The study also highlights India’s untapped import potential from the G7 economies of Germany, Canada, Japan, Italy, France, the US and UK.
“In terms of total imports from the G7, India is second to China, representing 12 per cent of the total potential E7 imports from the G7. However, in actual performance, India is behind in meeting its predicted imports from every G7 country except Germany. It’s lagging behind particularly in its imports from Japan, US and the UK which equate to over 16 billion USD of lost import opportunity,” the study notes.
The new Standard Chartered index, developed in partnership with independent macro analysis consultancy Oxford Analytica, found that G7 nations and companies were all under-performing in their export trade to the E7.
Of the 49 trade routes between individual G7 and E7 countries, only nine currently exceed or meet expectations. The remaining 40 trade routes under-perform by a total of USD 162 billion against their export potential. This constitutes a 30 per cent annual growth opportunity for the G7 to the E7.
“The E7 represent a critical highway to future growth for the G7 in 2018 and beyond,” the study concludes.
Germany is singled out as the greatest G7 to E7 success story, which exceeded its total predicted value of trade with the E7 by exporting USD 109 billion, double what is predicted.
“It is clear the E7 represent multi-billion-dollar trading opportunities for G7 governments and businesses searching for export diversification and growth. Companies should develop sector specific strategies and corridors, then identify how they can increase their opportunities there,” said Michael Vrontamitis, Head of Trade for Europe and Americas at Standard Chartered.
The bank’s index finds that the E7 story is dominated by China, with the country’s import potential representing over 70 per cent of export trade from the G7 countries.
India and Vietnam follow with the next highest import potential among the E7, however, they lag behind in total trade volume with the G7. Of the E7, these three Asian countries represent close to 90 per cent of predicted import trade with the G7.
The UK, US and France stand to realise the greatest gains if they can fulfil their E7 trade potential, the latest analysis finds.