India and Europe's Bilateral Trade Relationship

As we know, India was one of the first countries to develop relations with the European Union. Europe and India upgraded their strong relationship to a strategic partnership in 2004. India needs resources and expertise from the EU for the various priority areas, such as cyber security, urbanization, environmental protection, and skill development. India is the EU's 10th largest trading partner, accounting for 2.1% of EU total trade in goods, as per India Trade Data. In this blog, we will briefly discuss the trade relationship between India and Europe.

A Historical Overview of India and European Union Trade Ties

Trade between India and Europe has a long and rich history, dating back to ancient times. The first recorded trade between the two regions took place in the 1st century CE, when Roman ships brought goods from India to Europe, as per global trade data.

In the Middle Ages, Indian spices, textiles, and other goods were highly prized in Europe, and trade between the two regions flourished. In the 19th century, the British East India Company became the dominant power in India. The Company controlled much of the Indian economy, and its trade policies benefited British merchants at the expense of Indian traders. This led to resentment among many Indians and eventually contributed to the Indian independence movement.

Some of the key commodities that have been traded between India and Europe over the centuries include:

• Spices: India has long been a major producer of spices, which were highly prized in Europe. Some of the most popular spices traded between the two regions include pepper, cloves, cinnamon, and nutmeg.
• Textiles: India has also been a major producer of textiles for centuries. These textiles were in high demand in Europe, and they were often used to make clothing, carpets, and other goods.
• Indigo: Indigo is a blue dye that was originally produced in India. It was in high demand in Europe, and it was used to dye clothing, fabrics, and other items.
• Tea: Tea is a beverage that originated in China but was introduced to India in the 18th century. India has since become one of the world's leading producers of tea, and it exports a significant amount of tea to Europe.

Today, India and Europe continue to be important trading partners. The two regions exchange a wide range of goods and services, and they are working together to further develop their economic ties.

Trade Partnership between India and Europe

The trade relationship between India and Europe is significant, with the EU being India's third-largest trading partner and India being the EU's 10th-largest trading partner. In 2021, the total trade between the two sides was worth €88 billion, as per Europe Trade Data.

The EU exports a wide range of goods to India, including machinery and equipment, chemicals, transport equipment, and food and beverages. Based on India Trade Data, India's major exports to the EU are engineering goods, gems and jewellery, textiles, and chemicals. In June 2022, the EU and India launched the FTA negotiations and agreed to fast-track the talks with the target of concluding the deal by the end of 2023.

A successful FTA between India and the EU would have several benefits for both sides. It would boost trade and investment, create jobs, and help reduce poverty. It would also help to strengthen the strategic partnership between the two sides.

Here are some of the critical areas that could be covered by an FTA between India and the EU:

• Tariffs: The FTA would aim to reduce or eliminate tariffs on goods traded between the two sides.
• Non-tariff barriers: The FTA would also aim to address non-tariff barriers to trade, such as quotas and technical barriers.
• Services: The FTA would liberalize trade in services, such as banking, insurance, and telecommunications.
• Investment: The FTA would provide protection for investments made by companies from each side in the other's country.
• Intellectual property: The FTA would protect intellectual property rights, such as patents and copyrights.
• Sustainable development: The FTA would include provisions on sustainable development, such as environmental protection and labour standards

The negotiation of an FTA between India and the EU is a complex and challenging process. The potential benefits of such an agreement are significant for both sides. The two sides are committed to concluding the negotiations by the end of 2023, and it will be interesting to see if they can reach an agreement.

Some Trade Statistics for 2022-23

• Based on European Trade Data, the total trade between India and the EU in 2022-23 is estimated to be €120 billion, an increase of about 30% from 2021-22.
• India's exports to the EU are expected to reach €67 billion, while imports from the EU are expected to reach €54.4 billion, as per India Trade Data.
• The main commodities traded between India and the EU are machinery and equipment, chemicals, transport equipment, food and beverages, and textiles.

Also Read: The Growing Trade Ties between Russia and Saudi Arabia

Major Products Exported from Europe to India:

Here are the major products exported from Europe to India in 2022-23:

1. Machinery and equipment: This includes a wide range of products, such as industrial machinery, electrical machinery, and transport equipment.
2. Chemicals: This includes a wide range of products, such as plastics, fertilizers, and pharmaceuticals.
3. Transport equipment: This includes cars, trucks, and aircraft.
4. Food and beverages: This includes processed foods, beverages, and alcoholic drinks.
5. Textiles: This includes yarn, fabrics, and clothing.
6. Gems and jewellery: This includes diamonds, gold, and silver jewellery.
7. Pharmaceuticals: This includes medicines, vaccines, and medical devices.
8. Scientific instruments: This includes laboratory equipment, medical equipment, and measuring instruments.
9. Paper and paper products: This includes printing and writing paper, cardboard, and packaging materials.

These are just some of the major products exported from Europe to India. The specific products exported vary depending on the year and the economic conditions in both regions.

Who is India's largest trading partner in Europe?

As per the India trade data, the Netherlands is one of the top trading partners of India in Europe, after Germany, Switzerland, the UK, and Belgium. The Netherlands is also a major investor in India. According to statistics, India received $1.76 billion in foreign direct investment from the Netherlands. It was $4.6 billion in 2021-22.

Over 200 Dutch businesses, including Philips, Akzo Nobel, DSM, KLM, and Rabobank, have operations in India. The same is true for the Netherlands, where over 200 Indian businesses are operating, including all the big IT giants like TCS, HCL, Wipro, Infosys, Tech Mahindra, Sun Pharmaceuticals, and Tata Steel.

How to Find European Trade Data?

For businesses looking to expand their reach in the global market, finding European Trade Data can be a difficult task. One of the best websites to find Europe trade data is the EximPedia.app. We provide import and export data, HS codes, and other market information to search and analyze products and services that are traded globally, along with crucial details such as verified buyers, suppliers, importers and exporters lists, shipment details, etc. Also, we have comprehensive Global Trade Data allows traders to make the right decisions and helps them expand their businesses in the international market.
In conclusion, the India-EU bilateral trade relationship is significant. Trade in goods between the two regions has increased by about 30% in the last decade, and trade in services has grown significantly. The EU is a major source of foreign investment for India, and Indian companies are increasingly investing in the EU. The FTA is expected to cover a wide range of areas, including goods, services, investment, intellectual property, and sustainable development. If you have any queries regarding the India Trade Data or European Trade Data, connect with the experts at EximPedia.app today and request a free live demo!