India's trade surplus with the United Kingdom has grown marginally over the past decade, according to a recent report by rating agency ICRA. The newly agreed Free Trade Agreement (FTA) between the two nations is expected to improve overall trade volumes. Between 2014-15 and 2023-24, merchandise trade between India and the UK increased at a Compound Annual Growth Rate (CAGR) of 1 per cent. Imports rose at a CAGR of 6 per cent, while exports grew at a CAGR of 4 per cent. The trade surplus reached USD 4.5 billion in 2023-24, up from USD 4.3 billion in 2014-15. India’s merchandise trade with the UK recorded slow but steady growth. Imports from the UK consistently held a 1 per cent share in India’s total merchandise imports during the past decade. Similarly, the UK’s share in India’s total merchandise exports remained at 3 per cent. ICRA noted, “Tariff concessions on imports as well as exports are expected to improve the bilateral trade between the countries.” FTA to Boost Key Export Sectors Under the new FTA, 99 per cent of Indian exports will face zero duty. This move will open up new opportunities across various sectors, including textiles, metals, agricultural products, electrical and electronic goods, sports goods, and leather. The FTA also enables 90 per cent of Indian imports to benefit from reduced or zero tariffs, offering cost advantages to Indian consumers. The UK’s imports hold significance for India across 13 categories. These include precious and other metals, automobiles, pharmaceuticals, textiles, alcoholic beverages, and cosmetics. ICRA noted that more categories could see growth due to cost advantages provided under the FTA. Services and Financial Flows to See Gains India expects to gain in services trade through UK’s commitments in IT/ITeS, financial services, professional services, other business services, and educational services. The UK continues to contribute significantly to India’s FDI equity inflows, FPI-AUC, and remittances. ICRA stated, “The FTA is expected to ease professional mobility and exempt Indian workers from social security payments for three years – this will further boost these remittances.” Corporate entities from both countries maintain a strong presence in each other's markets. ICRA noted that the FTA is anticipated to bring considerable benefits to Indian corporates operating in the UK and vice versa. (With Inputs From ANI) Also Read: NBFCs Lead MSME Lending Surge, Beat Banks In Growth Rates: CareEdge Ratings