FTAs of India – an appraisal

May 2022
 FTA performance so far
Imports have grown faster than exports for 3 out of 4 After UAE, India now has FTAs with two of its top 10
FTA partners of India. trading partners

12 Export Import (in $ bill)

Compound Annual Growth Rate (in %) 10.3 INDONESIA
10 EXPORTS IMPORTS
SOUTH KOREA
8 7.4 GERMANY
6.8
SINGAPORE
6
4.6 IRAQ
4.1
4 HONG KONG
3
2.3 SAUDI ARABIA
2
UAE
0 CHINA
ASEAN SOUTH KOREA JAPAN SAFTA USA
-2 0 10 20 30 40 50 60 70 80 90 100
For SAFTA, compound annual growth rate is for the 14 year period be-
tween 2005-06 and 2019-20. For Japan, South Korea and ASEAN, for Data for 2019-20 (pre-pandemic period)
the 9 year period between 2010-11 and 2019-20
-1.3
Source :DGCI&S Kolkata, Ministry of Commerce & Industry
Source : DGCI&S Kolkata, Ministry of Commerce & Industry

India signed followings FTAs in the past:

• SAFTA – Signed on January 6, 2004, and has come into force on January
1, 2006, with full implementation by December 31, 2015.
• South Korea – Signed on 7th August 2009 and came into effect on 1st
January 2010.
• Japan – Signed on 16th February 2011 and came into force from 1st
August 2011.
• ASEAN – Signed on 8 October 2003 and the final agreement was on 13
August 2009. The free trade area came into effect on 1 January 2010.
• UAE – Signed on February 18, 2022 and came into
effect from May 1, 2022.
• Australia – Signed on April 2. This would be enhanced
to a full-fledged CECA later in 2022.
• India and the EU are aiming to conclude an FTA by late
2023 or early 2024. This would be the most significant
FTA for India as EU is its third largest trading partner
after the US and China.
2
 Top 10 products and top countries for India with export potentia l
Top 10 products with export potential ($ billion) Top 10 countries for Indian exports ($ billion)
Other organic chemicals 72%
France
Telephone sets & other voice/image
transmission apparatus 36% Malaysia
Aluminium, not alloyed, unwrought 50%
Bangladesh
Parts & accessories of motor vehicles,
nes 55%
UK
Shrimps & prawns, frozen 49%
Vietnam
Motor vehicles for the transport of 32%
persons, nes Germany
Semi-milled or wholly milled rice 50%
Hong Kong
Medicaments consisting of mixed or
62%
unmixed products, for retail sale UAE
Jewellery, of preciousmetal, nes 42% 58% China
Diamonds, worked
USA
0 5 10 15 20 25 30 35 40
0 10 20 30 40 50 60 70 80 90
ACTUAL EXPORTS UNTAPPED POTENTIAL REALISED POTENTIAL (in%)
Source :ITC Export Potential Map Calculation, ACTUAL EXPORTS UNTAPPED POTENTIAL
Source :ITC Export Potential Map Calculation,
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-
(https://exportpotential.intracen.org/en/resources/learning/glossary#a
exports)
ctual-exports)
• International Trade Center (ITC) estimates India’s untapped export potential to around US$ 234bn. (Potential export value in 2026 based on
projections of supply, demand, market access conditions and bilateral ease of trade, expressed in US$)
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
• Worked diamonds shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional
exports worth US$ 15 bn. Other major products showing high export potential include Jewellery & Precious metal articles,
Pharmaceutical components, Motor vehicles & parts, Rice, Chemicals etc.
• The markets with greatest potential for India’s exports are the US, China and the UAE.
• ITC model shows that the US market has largest difference between the potential and the actual exports in value terms—leaving room to realize
additional exports worth US$ 32 bn. These numbers are significant in the view of rising trade volatility.
3
India-UAE FTA

©2021 Deloitte Touche Tohmatsu India LLP. 44

India- UAE trade
Top 10 Exports to UAE 2019 & 2021 at HS 6 Digit
Top 10 Imports from UAE 2019 & 2021 at HS 6 Digit (US$ billion)
(US$ billion) 9.00
14.00 8.00
12.00 7.00
10.00 6.00
8.00 5.00
6.00 4.00
4.00 3.00
2.00 2.00
0.00 1.00
270900 710231 710812 271113 271112 271111 271019 271320 271012 720449
0.00
271012 711319 851712 710239 271019 890590 100630 710231 720839 281820
2019 2021
Source : DGCI&S Kolkata, Ministry of Commerce & Industry 2019 2021
Source : DGCI&S Kolkata, Ministry of Commerce & Industry

(Export-Import ​Petroleum oils and oils obtained from Bituminous minerals crude (HS 270900) at
Negative trade balance
US$ billion) US$11.66 bn shows the highest import value from UAE in 2021 whereas Light
35.00
oils ( HS 271012) at US$3.19 bn shows the highest export value to UAE.
30.00
​Among Exports HS 711319, Articles of Other Precious metal shows a significant
25.00
drop in export value dropping by 67% from US$8.24 bn in 2019 to US$2.73 bn.
20.00
​Among imports the top 3 products show a significant rise in import value from
15.00
2019 to 2021.
10.00
​The substantial increase in import can be seen as resulting in trade balance
5.00
turning negative from 2018-19 to 2020-21. The initial positive trade balance
0.00 seen before 2018-19 has died away completely and is a matter of concern, as
2016-17 2017-18 2018-19 2019-20 2020-21
seen in a negative trade balance in subsequent years.
INDIA EXPORTS TO UAE INDIA IMPORTS FROM UAE

Source : DGCI&S Kolkata, Ministry of Commerce & Industry 5

Export Potential between India and UAE
Top 10 products with Export Potential of UAE
Top 10 products with Export Potential of India in UAE in India
(US$ mill) (US$ mill)
Total Untapped Potential
Total Untapped Potential
Waste & scrap of stainless
T-Shirts & Vests of Cotton steel

Waste & scrap ofaluminium

Shrimps & prawns, frozen $2.34 bil-
$6.98 billion
lion
Medicaments consisting of mixed or Polyethylene
unmixed products, for retail sale
Wire of refinedcopper
Semi-milled or wholly milled rice

Jewellery, of preciousmetal, nes Diamonds, worked

0 2000 4000 6000 8000 10000 0 500 1000 1500 2000 2500

actual exports untapped potential actual exports untapped potential

Source :ITC Export Potential Map Calculation,
(https://exportpotential.intracen.org/en/resources/learning/glossar
y#actual-exports)
The products with greatest export potential from India to United Arab
Emirates are Jewellery, of precious metal, Diamonds, worked, and Semi-
milled or wholly milled rice.
Jewellery of precious metal shows the largest absolute difference
between potential and actual exports in value terms, leaving
room to realize additional exports worth US$3.1 bn.
Total untapped potential of top 10 products with export potential
of India in UAE is US$ 6.98 bn. (Potential export value in 2026 based on
projections of supply, demand, market access conditions and bilateral ease of trade,
expressed in US$)
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
Source :ITC Export Potential Map Calculation,
(https://exportpotential.intracen.org/en/resources/learning/glossar
y#actual-exports)
The products with greatest export potential from United Arab Emirates
to India are Diamonds, worked, Telephone sets & other voice/image
transmission apparatus and Wire of refined copper.
Total untapped potential of top 10 products with export
potential of UAE in India is US$ 2.34 bn. (Potential export value in 2026
based on projections of supply, demand, market access conditions and bilateral ease of
trade, expressed in US$
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
6
Top 10 Indian exports to UAE, with UAE tariff rates (2020)

India export to India export to % of India’s UAE import % of UAE UAE Applied
UAE Offer in
HS Code Commodity UAE the World exports to from the World imports from Tariff Rate
CEPA (%)
($ million) ($ million) the UAE ($ million) India (%)

271012 Light Oils 2300.94 8418.60 27.33 15147.99 15.19 5 0

711319 Jewellery of Precious Metal 2303.72 5734.29 40.17 6029.66 38.21 5 0

851712 Telephones For Cellular 1084.79 3,009.27 36.05 16443.27 6.60 0 0

710239 Diamonds Worked 825.37 14699.90 5.61 2954.35 27.94 5 0

271019 Other Petroleum Oils And Oils 936.54 17601.72 5.32 1026.51 91.24 5 0

890590 Other Vessels, Fire Floats Etc. 190.20 1889.11 10.07 864.36 22.00 0 0

100630 Semi/Wholly Milled Rice 380.61 7483.19 5.09 558.01 68.21 0 0

710231 Non-Industrial Diamonds Unworked 119.88 543.13 22.07 5354.44 2.24 0 0

0 (From 5th
720839 Flat-Rolled Products In Coils 156.73 2006.38 7.81 516.79 30.33 5 year
onwards)

281820 Aluminum Oxide 207.44 372.97 55.62 758.27 27.36 5 0

​UAE has offered a zero-tariff rate on top 10 products of export from India from 1st year onwards till the 10 th year as per India-UAE CEPA. This will substantially promote
India’s exports to UAE over the course of these next 10 years.
​Jewellery of precious metal shows highest export potential as the tariff has been reduced from 5% to zero tariff. 7
Top 10 UAE exports to India, with India tariff rates (2020)
India India Offer
UAE export UAE export to % of UAE’s India import % of India India
Effective in CEPA
HS Code Commodity to India the World exports to from world imports from Standard
Rate (%) (%)
($ million) ($ million) India ($ million) UAE Rate (%)

710231 Non-industrial diamonds unworked 4009.24 6226.28 64.39 9369.20 42.79 10 0 0

1% absolute
duty
Gold, incl. gold plated with platinum,
710812 2678.70 29188.13 9.18 21818.23 12.28 12.5 10 reduction
unwrought over the
applied rate

750300 Waste and scrap, of nickel 355.66 616.79 57.66 26.09 13.00 5 0 0

4.0 (TRQ -
740811 Wire of refined copper 305.99 1744.81 17.54 366.55 83.48 5 5 85,000 MT

Limestone flux; limestone and other

252100 222.20 252.62 87.96 403.46 55.07 10 2.5 0
calcareous stone
3.75
390120 Polyethylene with a specific gravity 192.05 1516.20 12.67 567.05 33.87 10 7.5 (TRQ -
285,000 MT

710239 Diamonds, worked 179.38 2338.52 7.67 6297.47 2.85 10 7.5 0

851712 Telephones for cellular networks 177.73 17151.66 1.04 2155.98 8.24 20 20 0

271012 Light oils and preparations 144.42 45849.06 0.31 1105.49 13.06 10 2.5 0
Semi-finished products of iron or non-
720720 131.87 194.81 67.69 2.87 45,00 15 7.5 0
alloy steel

India has offered a zero-tariff rate on most of the top 10 products of export from UAE from 1st year onwards till the 10 th year according to
India-UAE CEPA. This will substantially promote UAE’s exports to India over the course of these next 10 years.

8
PLI scheme & its impact on top 15 export products to UAE
Top 15 commodities account for more than 73% of total exports to UAE
%
April-February April-February April-February April-February UAE Offer
change % change
Commodity 2018-19 2019-20 2021-22 2022-23 PLI in CEPA
(YoY) (YoY)
(US$ million) (US$ million) (US$ million) (US$ million) (%)

Mineral fuels, oils & products 5969.51 5412.3 -9.33 2582.18 5351.6 107.25 No 0
Gems & Jewellery 9440.84 9203.38 -2.52 2235.6 4402.18 96.91 No 0
Nuclear reactors, boilers, machinery,
577.77 712.66 23.35 640.35 813.1 26.98 Yes 0
appliances and parts
Iron & steel 649.7 703.11 8.22 691.91 1465.8 111.85 No 0

Organic chemicals 403.57 353.1 -12.51 290.62 644.17 121.65 Yes 0

Vehicles other than railway or tramway 377.25 457.97 21.40 288.23 446.96 55.07 Yes 0

Pharmaceutical products 182.02 142.7 -21.60 217.13 179.54 -17.31 Yes 0

Electrical machinery 1498.81 2544.55 69.77 1332.39 2504.66 87.98 Yes 0

Cereals 395.53 310.4 -21.52 362.31 432.57 19.39 Yes 0

Cotton 55.35 57.01 3.00 50.64 107.05 111.39 Yes 0

Aluminium and articles 68.35 82.58 20.82 70.27 115.95 65.01 No 0

Plastic and articles 350.93 332.81 -5.16 270.44 449.49 66.21 No 0

Articles of iron or steel 409.54 389.37 -4.93 287 372.05 29.63 No 0

Apparel & clothing (knitted or crocheted) 1040.06 958.83 -7.81 816.58 848.11 3.86 Yes 0

Fish & other aquatic invertebrates 162.05 184.59 13.91 147.59 152.57 3.37 No 0

Total of top 15 10283.24 18285.80 77.82

Total Export to UAE 14559.24 24962.83 71.46
9
 Insights
• There has been a substantial increase in imports from UAE over the last 3 years from 2018-19 to 2020-21. The substantial increase in imports
can be seen as resulting in negative trade balance from 2018-19 to 2020-21 and can be a matter of concern for India.

• The top 3 products of import from UAE have risen significantly over the last 3 years and have outperformed the growth in exports.

• Petroleum products, gems & jewellery and electrical machinery account for nearly 50% of our exports to UAE. Export basket can be diversified
with the addition of pharmaceuticals, automobiles and chemicals which have a PLI scheme and where India has a competitive advantage. Data
shows that the automobile and chemicals sector show a substantial growth after the formulation of the PLI scheme. With the completion of the
CEPA agreement UAE would offer these products at zero duty to the Indian exporters which would expand the export opportunities in these
sectors.

• With regards to the top 15 exports to UAE many product groups have gained substantially such as Nuclear reactors, boilers, machinery
parts/appliances, boilers, machinery parts/appliances, Organic chemicals, vehicles other than railway or tramway, electrical machinery, cereals,
cotton and apparel/ textiles sector. The percentage growth in these product groups was much less in the period April-February 2018-19
to April-February 2019-20 i.e., before the introduction of the PLI scheme than in the period April-February 2021-22 to April-February 2022-
23.

• Jewellery of precious metal (HS 711319) shows the highest export potential for India in UAE. Total export potential for this product
is estimated by ITC at $8.3 billion with untapped potential being estimated at $3.1 billion. UAE applied MFN tariff rate for this
product is currently at 5% which would be reduced to zero through the India-UAE CEPA. This would expand the export opportunities for this
product in the coming years.

• Trade-in Pharmaceuticals: Both, India and UAE, have agreed to a separate annex on pharmaceuticals to facilitate access to Indian
pharmaceuticals products, especially automatic registration and marketing authorization in 90 days for products meeting specified criteria.

10
India-Australia FTA

©2021 Deloitte Touche Tohmatsu India LLP. 11

11
 India- Australia Trade
Top 10 exports to Australia 2019 & 2021 at HS 6 Digit
(US$ million)
Top 10 imports from Australia 2019 & 2020 at HS 6 Digit
(US$ million) 3000
120
100 2500

80 2000
60 1500
40
1000
20
500
0
71340 80211 100490 121190 110422 71350 71331 110412 51000 80510
0
271019 271012 300490 710239 711319 860310 100630 380893 610910 732591
2019 2021
Source :DGCI&S Kolkata, Ministry of Commerce & Industry 2019 2021
Source :DGCI&S Kolkata, Ministry of Commerce & Industry

Export-Import
16
(US$ million)
​Other Petroleum Oils And Oils Obtained From bituminous Minerals etc. (HS
14 271019) at US$2,823 mn shows the highest export value to Australia in
12 2021 and also the highest percentage increase from 2019.
10 ​Among imports only 2 products HS 71340 Lentils (Mosur), Dried And Shld
8 and HS 80211 Almonds Fresh Or Dried in Shell have a substantial imports.
6
​The rest of the products have marginal import and export trade. Hence, we
4
see that barring one product which has a substantial export value the rest of
2
the products are very small in both import and export value resulting in a
0 very small overall trade basket. We can also see that exports have been
2016-17 2017-18 2018-19 2019-20 2020-21
falling over the period 2018-19 to 2020-21 whereas imports have remained
INDIA EXPORTS TO AUSTRALIA INDIA IMPORTS FROM AUSTRALIA
at more or less at the same levels.
Source :DGCI&S Kolkata, Ministry of Commerce & Industry
12
Export Potential between India and Australia

Top 10 Products with Export Potential of India in

Top 10 products with Export Potential of Aus-
Australia (US$ million)
tralia in India (US$ million)
Total Untapped Potential
Total Untapped Potential
$726 million
Telephone sets Nickel, not alloyed, $1.09billion
unwrought
T shirts & vests of cotton Cotton, not
carded/combed
Insecticides, rodenticides,
fungicides Waste & scrap of
aluminium
Jewellery, of precious metal
Lentils, dried & shelled

Motor vehicles
0 100 200 300 400 500 600 700 800 Aluminium oxide, n.e.s
0 200 400 600 800 1000 1200

actual exports untapped potential actual exports untapped potential

Source :ITC Export Potential Map Calculation
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-
exports)
The products with greatest export potential from India to Australia are Motor
vehicles for the transport of persons, Medicaments consisting of mixed or
unmixed products, for retail sale, and Jewellery of precious metal.
Motor vehicles for the transport of persons shows the largest absolute
difference between potential and actual exports in value terms, leaving
room to realize additional exports worth $376 mn.
Total untapped potential of top 10 products with export potential of India
in Australia is US$726 mn. (Potential export value in 2026 based on projections of
supply, demand, market access conditions and bilateral ease of trade, expressed in US$)
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
Source :ITC Export Potential Map Calculation
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-
exports)
The products with greatest export potential from Australia to India
are Aluminum oxide, Chickpeas, dried & shelled and Lentils, dried
& shelled.
Total untapped potential of top 10 products with export
potential of Australia in India is US$ 1.09 bn. (Potential export
value in 2026 based on projections of supply, demand, market access
conditions and bilateral ease of trade, expressed in US$)
(https://exportpotential.intracen.org/en/resources/learning/glossary#ac
tual-exports)
13
Top 10 Indian exports to Australia, with Australia tariff rates (2021)
% of
% of India’s Australia Australia
India Export India Export Australia import Australia’s
exports to Applied Offer in
HS Code Commodity to Australia to World from world ($ imports from
Australia Tariff Rate ECTA (%)
($ million) ($ million) million) India
(%)

Other Petroleum Oils And Oils Obtained From

271019 2823.00 34642.97 8.15 14986.04 18.84 0 0
bituminous Minerals Etc.
271012 Light Oils And Preparations: 468.74 19081.07 2.46 3971.91 11.80 0 0

300490 Other Medicine Put Up For Retail Sale 310.29 14723.28 2.11 4676.49 6.64 0 0

710239 Diamonds worked 175.38 23845.18 0.74 500.761 35.02 0 0

711319 Articles Of Other Precious Mettle 142.10 8,419.83 1.69 1063.50 13.36 5 0
Coaches Powered From External Source Of
860310 63.18 152.85 41.33 367.47 17.19 5 0
Electricity
100630 Semi/Wholly Milled Rice 50.19 8407.45 0.60 171.20 29.32 0 0

Herbicides, Anti-Sprouting Products And

380893 47.18 1625.32 2.90 782.91 6.03 5 0
Plant-Growth Regulated:

610910 T-Shirts Etc. Of Cotton 45.10 1698.54 2.66 571.99 7.88 5 0

Grinding Balls And Smaller Articles For Mills

732591 43.77 214.95 20.36 106.67 41.03 5 0
Of Malleable Cast Iron

Australia has offered a zero-tariff rate on most of the products of export from India. This is expected to benefit most of India’s exports to
Australia on products related to textiles, apparels, agriculture and fish products, leather, footwear, furniture and sports goods, jewellery,
engineering goods, and selected pharmaceuticals and medical devices.
14
Top 10 Australia exports to India, with India tariff rates (2021)
% of
% of India’s India
Australia Australia export Australia’s India import India Offer in
imports from Applied
HS Code Commodity export to India to World exports to from world ECTA (%)
Australia Tariff Rate
($ million) ($ million) India ($ million)
(%)

270112 Bituminous coal 8915.60 43608.82 20.44 1,310.15 68.00 5 0

710813 Gold, incl. gold plated with platinum 1704.42 15023.52 11.35 550.40 30.00 12.5 EL (Exc List)

260300 Copper ores and concentrates 733.68 5838.88 12.57 2,516.47 29.16 2.5 0

760200 Waste and scrap, of aluminum 110.75 647.91 17.09 3,137.30 3.53 2.5 EL (Exc List)

Pigments and preparations based on

320611 107.66 650.34 16.55 1,012.95 10.63 10 0
titanium dioxide of a kind
TRQ (Tariff Rate
71340 Dried, shelled lentils 101.14 536.07 18.87 524.61 19.28 20
Quota)
Rs. 42
80211 Fresh or dried almonds in shell 99.55 217.48 45.77 862.20 11.55 TRQ
per kg

510111 Greasy shorn wool 98.89 2417.02 4.09 24.43 40.00 2.5 0

710812 Gold, incl. gold plated with platinum 92.92 2483.20 3.74 55,231.50 0.17 12.5 EL

520100 Cotton, neither carded nor combed 62.55 1478.45 4.23 519.81 12.03 5 EL

India has offered Duty elimination (E), Reduction (R), TRQ (T), Other condition (C), Exclusion List (EL) on all the products of export from
Australia. This will substantially promote Australia’s exports to India in sectors such as coal, mineral ores, wines which are among its top exports
to India.
15
PLI scheme & its impact on top 15 export products to Australia
Top 15 commodities account for more than 80% of total exports to Australia
Commodity April- April-
%
February February April-February April-February Australia
change % change
2018-19 2019-20 2021-22 2022-23 PLI Offer in
(YoY) (YoY)
(US$ million) (US$ million) (US$ million) (US$ million) ECTA (%)

Mineral fuels, oils & products 639.89 362.82 -43.30 1034.74 4122.48 298.41 No 0

Gems & Jewellery 271.55 243.47 -10.34 249.97 314.7 25.90 No 0

Nuclear reactors, boilers, machinery,

147.21 142.37 -3.29 171.56 226.23 31.87 Yes 0
appliances and parts

Iron & steel 36.09 28.62 -20.70 41.38 100.34 142.48 No 0

Organic chemicals 42.98 41.43 -3.61 40.58 48.48 19.47 Yes 0

Vehicles other than railway or tramway 73.28 79.94 9.09 104.06 177.94 71.00 Yes 0

Pharmaceutical products 224.64 235.87 5.00 284.56 325.71 14.46 Yes 0

Electrical machinery 162.87 119.41 -26.68 156.48 179.97 15.01 Yes 0

Cereals 47.92 57.02 18.99 71.55 52.65 -26.42 Yes 0

Cotton 5.95 4.43 -25.55 6.46 4.79 -25.85 Yes 0

Aluminium and articles 15.51 23.04 48.55 33.29 78.17 134.82 No 0

Plastic and articles 58.8 48.22 -17.99 55.79 76.47 37.07 No 0

Articles of iron or steel 126.13 128.85 2.16 158.47 189.65 19.68 No 0

Apparel & clothing (knitted or crocheted) 73.94 81.43 10.13 82.8 114.3 38.04 Yes 0

Fish & other aquatic invertebrates 1.81 1.61 -11.05 2.23 2.05 -8.07 No 0

Total of top 15 2493.92 6013.93 141.14

Total Export to Australia 3647.55 7474.86 104.93
16
 Insights

• Motor vehicles for the transport of persons shows the largest absolute difference between potential and actual exports in value
terms, leaving room to realize additional exports worth $376 mn. Australia applied MFN tariff rate for this product is currently at 0% with
the same rate of duty offered in ECTA. This would expand the export opportunities of this commodity in the coming years.

• There has been a substantial decline in exports from India to Australia over the last 3 years from 2018-19 to 2020-21. Also, the
overall trade has also been quite low with a very small trade basket. Overall, the India-Australia trade is quite low in comparison to India’s trade
with some of the major countries such as US, China or EU.

• With regards to the top 15 exports to Australia many product groups have gained substantially such as Nuclear reactors, boilers, machinery
parts/appliances, Organic chemicals, Vehicles other than railway or tramway, Pharmaceutical Products, Electrical machinery, and Apparel/ Textiles
sector. The percentage growth in these product groups was much less in the period April-February 2018-19 to April-February 2019-20 i.e., before
the introduction of the PLI scheme than in the period April-February 2021-22 to April-February 2022-23. Many of these product groups have
been offered a zero-duty tariff rate from Australia which would significantly boost up the export opportunities in the coming years.

• Mineral fuels, oils & products accounts for more than 50% of our exports to Australia. Export basket to Australia be diversified with the
addition of pharmaceuticals, automobiles, textile and apparel products which have a PLI scheme and where India has a competitive advantage.
Data shows that the automobiles and textiles/apparel sector show a substantial growth in exports to Australia after the
formulation of the PLI scheme.

17
Potential EU FTA

©2021 Deloitte Touche Tohmatsu India LLP. 18

18
India- EU trade India’s bilateral trade with EU in 2020-21 (US$
billion)
Export-Import (US$ billion)
60 Total trade -
50 Others, 8.7 $80.08 billion
40
30 France, 8.85 Germany, 21.07
20
10
0
2016-17 2017-18 2018-19 2019-20 2020-21 Netherlands,
9.79
INDIA EXPORTS TO EU INDIA IMPORTS FROM EU Switzerland,
Source : DGCI&S Kolkata, Ministry of Commerce & Industry Belgium, 19.49
12.18

Export potential in 7 major EU markets (in $ bill)

Source : DGCI&S Kolkata, Ministry of Commerce & Industry

TOTAL
Switzerland Top 10 exports to the EU 2021 at HS 6
$26.8 billion
Belgium Digit ($ billion)
Spain
Netherlands 7.00
Italy 6.00
France
5.00
Germany
4.00
0 5 10 15 20 25 30
3.00

ACTUAL EXPORTS UNTAPPED POTENTIAL

2.00
Source :ITC Export Potential Map Calculation, 1.00
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual- 0.00
exports) 271019 710239 300490 851712 721049 760110 870899 401170 841112 610910

Untapped export potential for India in the seven major markets of the EU is
HS Code
around $26.8 billion, as per ITC model. (Potential export value in 2026 based on
projections of supply, demand, market access conditions and bilateral ease of trade, expressed Source : DGCI&S Kolkata, Ministry of Commerce & Industry
19
in US$)
 Export Potential between India and EU

Top 10 products with Export Potential of India in Top 10 Products with Export Potential of EU in India
EU (US$ bill) (US$ bill)
Total Untapped Potential Total Untapped Potential
$9.70 bil-
$12.49 billion lion
Other organic chemicals Waste & scrap of stainless steel

Other machinery
Aluminium, not alloyed

Motor vehicles for the transport of Diamonds, worked

persons, nes

Other organic chemicals

Jewellery, of preciousmetal

Aircraft >15,000kg
Diamonds, worked
0 2 4 6 8 10 12
0 2 4 6 8 10 12 14
actual exports untapped potential
actual exports untapped potential
Source :ITC Export Potential Map Calculation,
Source :ITC Export Potential Map Calculation
https://exportpotential.intracen.org/en/resources/learning/glossary#actu
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-
al-exports)
exports)

The products with greatest export potential from India to EU are
Diamonds, worked, Medicaments consisting of mixed or unmixed
products, for retail sale and Jewellery, of precious metal. India has
the highest supply capacity in Diamonds, worked.
Total untapped potential of top 10 products with export potential
of India in EU is US$ 12.49 billion (Potential export value in 2026 based on
projections of supply, demand, market access conditions and bilateral ease of trade,
expressed in US$)
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
The products with greatest export potential from EU to India are Aircraft
>15,000kg, Other organic chemicals, and Parts & accessories of
motor vehicles.
Total untapped potential of top 10 products with export potential
of EU in India is $9.70 billion (Potential export value in 2026 based on
projections of supply, demand, market access conditions and bilateral ease of trade,
expressed in US$)
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
20
Top 10 India exports to the EU, with EU tariff rates (2021)

EU MFN
India export to India export to % of India’s EU import from % of EU
Applied Tariff
HS Code Commodity the EU world exports to the world imports from
Rate
($ billion) ($ billion) EU ($ billion) India
(%)

Other petroleum oils and oils obtained from

271019 6.64 34.64 19.16 52.32 12.69 0
bituminous minerals etc.
710239 Diamonds worked 2.17 23.84 9.10 3.50 62.00 0

300490 Other medicine put up for retail sale 1.53 14.72 10.39 66.58 2.29 0

Telephones for cellular networks or for

851712 1.11 4.84 22.93 32.84 3.38 0
other wireless networks
721049 Other products of iron/non-alloy steel 0.94 1.29 72.86 7.28 12.91 0

760110 Aluminum-not alloyed 0.92 5.22 17.62 3.48 26.43 3

Other parts and accessories of vehicles of

870899 0.67 3.07 21.82 24.71 2.71 3
hydrogen
Of a kind used on agricultural or forestry
401170 0.58 1.11 52.25 1.18 49.15 4
vehicles and machines
841112 Turbo-jets of a thrust>25 kn 0.58 2.28 25.43 10.22 5.67 0

610910 T-shirts etc. of cotton 0.49 1.69 28.99 7.13 6.87 12

In the top 10 products of export from India to EU HS 710239 Diamonds worked shows the greatest potential and is also one of the top
products exported to EU at $2.17 bn. EU market gives a duty-free access to Indian exporters on this product.

Also, the top exported product to EU, HS 271019 Other petroleum oils and oils obtained from bituminous minerals contributes a substantial
percentage of export to EU which is also duty free.
21
Top 10 EU exports to India, with India tariff rates (2021)

% of EU’s % of India India MFN

EU export to EU export to India import
exports to imports from Applied
HS Code Commodity India World from world
India EU Tariff Rate
($ million) ($ million) ($ million)
(%)

880240 Airplanes and other powered aircraft 4157.26 47470.78 8.76 3,798.36 109.45 3
Parts suitable for use solely or
852990 principally with flat panel display 411.29 3842.11 10.70 2,809.14 14.64 7.5
modules
841112 Turbojets of a thrust > 25 kN 359.88 12080.99 2.98 2,034.63 17.69 7.5
852610 Radar apparatus 263.77 2141.63 12.32 53.95 48.00 7.5
Machinery for working rubber or
847780 255.85 2488.70 10.28 543.63 47.06 7.5
plastics
271111 Natural gas, liquefied 241.76 1188.55 20.34 12,056.09 2.01 2.5
Medicaments consisting of mixed or
300490 240.87 107776.91 0.22 1,365.11 17.64 10
unmixed products
740400 Waste and scrap, of copper 235.11 6220.29 3.78 1,524.16 15.43 2.5

760200 Waste and scrap, of aluminum 214.70 3700.43 5.80 3,137.30 6.84 2.5

HS 880240 Airplanes and other powered aircraft has the highest export value and also shows the largest export potential from EU to India.
The total export potential for this product according to ITC calculations comes out to be US$3bn with untapped potential
remaining to be US$1.1bn.
22
PLI scheme & its impact on top 15 export products to EU
Top 15 commodities account for more than 72% of total exports to EU

April-February April-February April-February April-February

% change % change
Commodity 2018-19 2019-20 2021-22 2022-23 PLI
(YoY) (YoY)
(US$ million) (US$ million) (US$ million) (US$ million)

Mineral fuels, oils & products 5365.52 5617.57 4.70 2593.45 7407.71 185.63 No
Gems & Jewellery 2782.77 2588.24 -6.99 1583 3076.8 94.37 No
Nuclear reactors, boilers, machinery,
3654.25 3522.8 -3.60 3128.06 4132.08 32.10 Yes
appliances and parts
Iron & steel 2238.67 1906.17 -14.85 1957.06 5419.01 176.90 No

Organic chemicals 3335.48 3490.33 4.64 3771.96 4773.67 26.56 Yes

Vehicles other than railway or tramway 1779.76 1496.04 -15.94 1231.93 1822.32 47.92 Yes

Pharmaceutical products 1186.21 1474.29 24.29 1714.32 1929.65 12.56 Yes

Electrical machinery 2011.32 2154.5 7.12 2731.51 3960.32 44.99 Yes

Cereals 137.28 109.14 -20.50 169.39 110.08 -35.01 Yes

Cotton 434.06 384.79 -11.35 346.99 589.75 69.96 Yes

Aluminium and articles 795.1 368.34 -53.67 418.84 1955.3 366.84 No

Plastic and articles 1121.64 895.15 -20.19 822.32 1380.06 67.83 No

Articles of iron or steel 1433.81 1383.27 -3.52 1182.3 1806.05 52.76 No

Apparel & clothing (knitted or crocheted) 2137.76 1966.29 -8.02 1592.63 2003.69 25.81 Yes

Fish & other aquatic invertebrates 660.77 650.95 -1.49 582.76 862.95 48.08 No
Total of top 15 23826.52 41229.44 73.04
Total Export to EU 36318.89 57049.07 57.08

23
 Insights
• Trade in goods between India and EU increased by 12.5% in the last decade, but EU’s overall exports to India witnessed a decline.

• The untapped export potential for India to the seven major markets of the EU – Germany, France, Italy, Netherlands, Spain,
Belgium and Switzerland is around $26.8 billion, according to International Trade Centre.

• India’s major exports to the EU include mineral fuels, Nuclear reactors, boilers, machinery parts/appliances, electrical machinery, organic
chemicals, automobiles and auto components, pharmaceuticals, gems and jewellery and iron and steel products. Many of these
products have a PLI scheme which would lead to an increase in their manufacturing. An FTA with EU will help Indian exporters
gain competitive advantage in the EU markets while helping domestic manufacturers get cheaper access to imports from the EU.

• EU is India’s third largest trading partner accounting for 11.8% of India’s total trade in 2020-21, after the US (12.61%) and China
(12.59%) and is the second largest export destination after the US.

• India and the EU restarted their FTA negotiations in goods and services in early 2021 after a gap of eight years. The two trading partners
aim to work out pacts in investments and geographic indications, parallel to the FTA engagement.

• India and the EU are to resume their FTA negotiations – the first round of talks will be in June. India and the EU want to complete FTA
negotiations before their next electoral cycle in 2024.

• On April 25, 2022, India and the EU set up a high-level Trade & Technology Commission to strengthen bilateral ties. Currently, only the US
has a similar technical agreement with the EU.

• The trade and technology commission will provide political-level oversight to the India-EU ties, thereby ensuring improved coordination.

• The two sides intend to have closer cooperation on trade, climate, clean energy, digital technology, and people-to-people ties. Possible
collaboration in areas like green hydrogen was also mentioned.

24
Potential UK FTA

©2021 Deloitte Touche Tohmatsu India LLP. 25

25
India- UK Trade
Top 10 Exports to UK 2019 & 2021 at HS 6 Digit
Top 10 Imports from UK 2019 & 2021 at HS 6 Digit (US$ million)
(US$ million)

1000 600
900
800 500
700
600 400
500
400 300
300
200 200
100
0
710692 710812 760200 890590 300490 470790 740400 220830 841112 711029 100

2019 2021 0
Source : DGCI&S Kolkata, Ministry of Commerce & Industry 300490 851712 711319 710692 841112 710239 271019 640391 100630 611120

2019 2021
Source : DGCI&S Kolkata, Ministry of Commerce & Industry
Export-Import to UK
(US$ million)
​Semi manufactured silver (HS 710692) at US$757 mn shows the highest
12,000.00
import value from UK in 2021 whereas other medicines Put up for retail sale ( HS
10,000.00 300490) at US$525 mn shows the highest export value to UK.

8,000.00 ​Among Exports HS 851712, Telephones for cellular networks shows a

significant increase in export value from US$36 mn in 2019 to US$414
6,000.00 mn.
4,000.00 ​From 2016-17 to 2020-21 exports have remained at more or less the
2,000.00 same levels with a marginal drop from 2019-20 onwards. Imports on the
other hand have increased till 2018-19 and then declined after 2018-19.
0.00
2016-17 2017-18 2018-19 2019-20 2020-21

Export Import
Source : DGCI&S Kolkata, Ministry of Commerce & Industry 26
 Export Potential between India and UK

Top 10 products with Export Potential of India in Top 10 products with Export Potential of UK in
UK (in $ mill) India (in $ mill)
total untapped potential
total untapped potential Medicaments consisting of mixed or unmixed products, for retail sale
Parts & accessories of motor vehicles, nes
$1.09billion
Semi-milled or wholly milled rice (Prepared) diagnostic/laboratory reagents & certified reference materials
Diamonds, worked
Telephone sets & other voice/image
transmission apparatus Airplane/helicopter parts, nes
Waste & scrap of aluminium
Turbojets of a thrust >25kN Other organic chemicals
Waste & scrap of iron/steel, n.e.s.
Medicaments consisting of mixed or
unmixed products, for retail sale Whiskies
Turbojets of a thrust >25kN
Jewellery, of precious metal, nes
0 0 0 0 0 0 0 0 0 0
20 40 60 80 100 120 140 160 180 Actual exports Untapped
actual exports untapped potential
Source :ITC Export Potential Map Calculation
Source :ITC Export Potential Map Calculation (https://exportpotential.intracen.org/en/resources/learning/glos
(https://exportpotential.intracen.org/en/resources/learning/glossa sary#actual-exports))
ry#actual-exports)
The products with greatest export potential from United Kingdom to
The products with greatest export potential from India to United Kingdom are India are Turbojets of a thrust >25kN, Whiskies, and Waste & scrap
Diamonds, worked, Jewellery, of precious metals and Medicaments consisting of of iron/steel, n.e.s.. Turbojets of a thrust >25kN shows the
mixed or unmixed products, for retail sale. Diamonds, worked shows the largest absolute difference between potential and actual
largest absolute difference between potential and actual exports in value exports in value terms, leaving room to realize additional
terms, leaving room to realize additional exports worth $16 bn. exports worth $639 mn.
Total untapped potential of top 10 products with export
Total untapped potential of top 10 products with export potential of India potential of UK in India is US$ 1,466 mn. (Potential export value
in UK is US$1,678 mn. (Potential export value in 2026 based on projections of supply, demand, in 2026 based on projections of supply, demand, market access conditions
market access conditions and bilateral ease of trade, expressed in US$)
and bilateral ease of trade, expressed in US$)
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
(https://exportpotential.intracen.org/en/resources/learning/glossary#actual-exports)
27
Top 10 Indian exports to UK, with UK tariff rates (2021)

India Export India Export UK import UK Applied

% of India’s % of UK’s imports
HS Code Commodity to UK to World from world Tariff Rate
exports to UK from India
($ million) ($ million) ($ million) (%)

300490 Other Medcne Put Up For Retail Sale 525.55 14,723.28 3.57 12449.32 4.22 0
851712 Telephones For Cellular Networks 414.64 4,847.67 8.55 10366.08 4.00 0
711319 Jewellery of Precious metal 309.84 8,419.83 3.68 2248.70 13.78 2
710692 Semi Manufactured Silver 293.45 348.61 84.18 981.99 29.88 0
841112 Turbo-Jets Of A Thrust>25 Kn 227.88 2,289.33 9.95 7797.32 2.92 0

710239 Diamonds worked 171.37 23,845.18 0.72 1461.82 11.72 0

Other Petroleum Oils And Oils Obtained From
271019
bituminous Minerals Etc
170.14 34,642.97 0.49 11818.54 1.44 0

640391 Other Ankle Covered Footwear 144.78 779.05 18.58 517.70 27.97 8

100630 Semi/Wholly Miled Rice W/N Polished/Glazed 134.97 8,407.45 1.61 258.08 52.30 16.47

611120 Babies Garments Etc Of Cotton 132.06 790.64 16.70 483.26 27.33 8

In the top 10 products of export from India to UK HS 711319 Jewellery, of precious metals shows the greatest potential and is also one
of the top products exported to UK at $309.84 Mn. UK government charges a 2% MFN Tariff rate on this product to Indian exporters.

28
Top 10 UK exports to India, with India tariff rates (2021)

UK export to UK export to % of UK’s India import % of India’s India Applied

HS Code Commodity India World exports to India from world imports from Tariff Rate
($ million) ($ million) ($ million) UK (%)

Silver, incl. silver plated with gold or

710691 754.08 3173.086 23.76 191.32 394.15 12.5
platinum
760200 Waste and scrap, of aluminium 304.55 956.919 31.83 3,137.30 9.71 2.5

841112 Turbojets of a thrust > 25 kN 236.36 12373.61 1.91 2,034.63 11.62 7.5

220830 Whiskies 201.22 6377.696 3.16 220.00 91.46 150

Waste and scrap, of copper (excluding
740400 167.27 1655.249 10.11 1,524.16 10.97 2.5
ingots or other similar unwrought shapes
Petroleum oils and oils obtained from
270900 141.66 16997.3 0.83 105,987.03 0.13 5
bituminous minerals, crude
841191 Parts of turbojets or turbo-propellers 112.91 7924.973 1.42 93.46 120.81 7.5
"Recovered ""waste and scrap"" paper or
470790 102.33 352.153 29.06 1,310.97 7.81 10
paperboard
"Recovered ""waste and scrap"" paper or
470710 98.72 551.346 17.91 377.72 26.14 10
paperboard of unblended

In the top 10 products of export from UK to India HS 841112 Turbojets of a thrust > 25 kN shows the greatest potential and is also one of
the top products exported to India at $236.36 Mn. Indian government charges a 7.5% MFN Tariff rate on this product to UK exporters.

29
PLI scheme & its impact on top 15 export products to UK
Top 15 commodities account for more than 60% of total exports to UK
Commodity April- April- % change April-February 2021- April-February % change PLI
February February (YoY) 22 2022-23 (YoY)
2018-19 2019-20 (US$ (US$ million) (US$ million)
(US$ million)
million)

Mineral fuels, oils & products 521.04 371.83 -28.64 226.42 298.69 31.92 No
Gems & Jewellery 663.69 451.38 -31.98 514.41 712.43 38.49 No
Nuclear reactors, boilers, machinery, 914.31 936.65 2.44 558.64 932.77 66.97 Yes
appliances and parts
Iron & steel 98.27 78.07 -20.56 72.23 318.1 340.40 No
Organic chemicals 208.98 223.61 7.00 216.33 240.73 11.28 Yes
Vehicles other than railway or tramway 404 393.88 -2.50 217.29 205.18 -5.57 Yes

Pharmaceutical products 413.78 487.77 17.88 551.76 565.32 2.46 Yes

Electrical machinery 298.3 337.53 13.15 478.1 856.73 79.19 Yes
Cereals 165.81 108.31 -34.68 139.63 125.3 -10.26 Yes
Cotton 20.51 22.16 8.04 14.07 23.95 70.22 Yes
Aluminium and articles 64.75 86.48 33.56 47.45 97.45 105.37 No
Plastic and articles 167.34 189.64 13.33 189.27 245.51 29.71 No
Articles of iron or steel 266.24 292.11 9.72 236.98 390.72 64.87 No
Apparel & clothing (knitted or crocheted) 779 711.24 -8.70 530.86 647.92 22.05 Yes

Fish & other aquatic invertebrates 160.53 120.93 -24.67 98.82 139.26 40.92 No

Total of top 15 5146.55 4811.59 -6.50 4092.26 5800.06 41.73

Total Export to UK 8805.91 8396.92 -4.64 6919.99 9432.77 36.31
30
 Insights

• Exports have remained at more or less the same levels with a marginal drop from 2019-20 onwards. Imports on the other hand have increased till 2018-19 and then

declined after 2018-19.

• With regards to the top 15 exports to UK many product groups have gained substantially such as Nuclear reactors, boilers, machinery parts/appliances , Organic

chemicals, electrical machinery, cotton and apparel/ textiles sector. The percentage growth in these product groups was much less in the period April-February

2018-19 to April-February 2019-20 i.e., before the introduction of the PLI scheme than in the period April-February 2021-22 to April-February 2022-23.

• Jewellery of precious metal (HS 711319) shows the highest export potential for India in UK. Total export potential for this product is estimated by ITC at $579

million with untapped potential being estimated at $336 million. UK applied MFN tariff rate for this product is currently at 2%. If the tariff rate on this product is

reduced, then this would expand the export opportunities for this product in the coming years.

• Export basket can be diversified with the addition of pharmaceuticals, aluminium articles and nuclear reactors which have a PLI scheme and where India has a

competitive advantage. Data shows that the nuclear reactors and aluminium articles show a substantial growth after the formulation of the PLI scheme.

31
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Glossary for HS Codes
HS Code Description

51000 Ambergris, castoreum, civet and musk; cantharides; bile, whether or not dried; glands and other animal products

71331 Dried, shelled beans of species

71340 Dried, shelled lentils, whether or not skinned or split

71350 Dried, shelled broad beans whether or not skinned or split

80211 Fresh or dried almonds in shell
80510 Fresh or dried oranges
100490 Oats
100630 Semi-milled or wholly milled rice, whether or not polished or glazed
100630 Semi-milled or wholly milled rice, whether or not polished or glazed
110412 Rolled or flaked grains of oats
110422 Hulled, pearled, sliced, kibbled or otherwise worked oat grains
121190 Plants, parts of plants, incl. seeds and fruits, used primarily in perfumery, in pharmacy or for insecticidal
270900 Petroleum oils and oils obtained from bituminous minerals, crude

271012 Light oils and preparations, of petroleum

271019 Medium oils and preparations, of petroleum or bituminous minerals, not containing biodiesel, n.e.s.
271111 Natural gas, liquefied
271112 Propane, liquefied
271113 Butanes, liquefied
271320 Petroleum bitumen
33
Glossary for HS Codes (Cont.)
HS Code Description
281820 Aluminium oxide

300490 Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic purposes

380893 Herbicides, anti-sprouting products and plant-growth regulators

401170 New pneumatic tyres, of rubber, of a kind used on agricultural or forestry vehicles and machines
610910 T-shirts, singlets and other vests of cotton, knitted or crocheted
710231 Non-industrial diamonds unworked or simply sawn, cleaved or bruted
710239 Diamonds, worked, but not mounted or set
710812 Gold, incl. gold plated with platinum, unwrought, for non-monetary purposes
711319 Articles of jewellery and parts thereof, of precious metal other than silver, whether or not plated
720449 Waste and scrap of iron or steel
720839 Flat-rolled products of iron or non-alloy steel

721049 Flat-rolled products of iron or non-alloy steel, of a width of >= 600 mm, hot-rolled or cold-rolled
732591 Grinding balls and similar articles for mills, cast
760110 Aluminium, not alloyed, unwrought
841112 Turbojets of a thrust > 25 kN
851712 Telephones for cellular networks "mobile telephones" or for other wireless networks

860310 Self-propelled railway or tramway coaches, vans and trucks, powered from an external source of electricity

Parts and accessories, for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor
870899
vehicles

890590 Light-vessels, fire-floats, floating cranes and other vessels, the navigability of which is subsidiary to their main function
34