“Britain is, [David Cameron] says, on track to meet its target of doubling trade with India by 2015. But as several businessmen on the plane told me, it was starting from a pretty low base. Belgium trades more with India than we do.”
James Landale, BBC, 18 February 2013
With the Prime Minister leading the ‘largest ever’ delegation of business leaders to India this week in an attempt to improve trade relations between Britain and its former colony, much has been written about the current state of play between the two countries.
The BBC’s political editor James Landale is one of those travelling with the delegation, and today he reported that any improvement in trading links brought about by David Cameron’s visit might not mean much on the ground, given that Britain was “starting from a pretty low base.” Apparently, Belgium trades more with India than the UK does.
So can Belgium – a nation roughly a sixth of the size of the UK that was once famously described as a “non-country” by UKIP leader Nigel Farage – really have better trading links than we do?
The short answer is yes.
According to figures published by the Indian Government’s Department of Commerce, Belgium is India’s 12th most important trading partner, accounting for $17.6 billion worth of imports and exports in 2011/12. The UK meanwhile lies 17th in that list, exchanging $16.3 billion worth of goods and services in the same period.
While the UK does spend slightly more than Belgium on Indian imports, the lowlands country accounts for 2.1% of goods and services bought in India, whereas the UK holds a 1.6% share. China was India’s biggest trading partner in 2011/12, whereas Switzerland was India’s most important European partner.
So does this mean that the UK is starting from a “low base”?
When we delve a little deeper into the reasons for Belgium outranking the UK in terms of its trade links with India, the waters become a little murkier.
According to the Indian Embassy in Belgium, around 70% of bilateral trade is in gemstones and jewellery. This is not particularly surprising: the Belgian city of Antwerp is known as the diamond capital of the world, through which over half of the world’s diamonds pass in trade. Meanwhile, the Indian city of Surat cuts 9 out of 10 of the world’s diamonds.
So given these historical links forged by the diamond trade, Belgium might not be the best comparator for a “low base”. In fact, if we look at the value of the UK goods and services bought by India, it compares favourably to many similarly-sized European countries, weighing in at more than double the sums spent on French or Italian exports.
So while the claim repeated by James Landale isn’t wrong, it might well give the wrong impression about how large UK-India trade is: the size of India-Belgium trade shouldn’t be underestimated.