The United Kingdom officially entering into deep recession is bad news not only for the island nation but also for India, which may have to face rough weather from the economic crisis engulfing one of its major trade partners. The United Kingdom reported a massive economic contraction, with the GDP shrinking 20.4 per cent in the first quarter of FY 2020-21. It is the worst quarterly slump on record for the UK, and the second one in a row, officially taking the country into recession. In the era of globalisation, the UK’s recession may send rough winds towards India as well. The UK is among the few countries with which India has a trade surplus and both nations share a trade relation of over $15 billion annually.
The UK is a major market of India’s apparel, footwear, nuclear reactors, boilers, machinery, iron & steel, and pharma products, amongst others. Also, the share of India’s exports with Britain is nearly double the share of imports it has with the English nation. India exported goods worth $8.7 billion to the UK in the last fiscal, which was 2.7 per cent of India’s overall exports, according to the Department of Commerce. However, India imported goods worth $6.7 billion, which was only 1.4 per cent of India’s overall imports.
The UK economy has suffered more than any major European nation during the coronavirus lockdowns, pushing the country into its first recession since 2009. There has also been a massive job loss and it is expected that more pain is underway. Meanwhile, the UK and India have recently called for deeper trading relations at the Cabinet-level summit held last month. Both nations had agreed to explore opportunities for expanding and deepening bilateral trade relations including an enhanced trading partnership as the first step on a wider roadmap.
Singapore, which is another major trade partner of India with trade relations of $23 billion annually and comprising 3 per cent of India’s total trade, has also been floating on the pool of recession. Singapore’s GDP plunged a record 42.9 per cent on an annualized basis in the second quarter this year.
