The United Kingdom has strengthened its investments in India to become the largest single western investor, while British companies have created over 422,000 jobs in India since the turn of the century, according to the CBI and Grant Thornton India’s Sterling Assets: Britain Meets India report.
Between 2000 and 2018, total FDI which flowed into India from all channels from the UK is estimated at $50.57 billion. Of this, the UK directly invested $26.09 billion in India – increasing its investment by $847 million between 2017 and 2018 – representing 7% of all foreign direct investment (FDI) into the country. Close to two fifths (38%) of British companies made new investments in India in 2017. The UK is the fourth largest investor in India and remains the largest investor into India outside of South East Asia and Africa. Whilst it is no longer the largest G20 investor in India – Japan narrowly overtook the UK – it is substantially ahead of Germany and France, who only contribute 3% and 2% in FDI respectively.
The UK created around 52,000 new private sector jobs from 2016 to 2018 – a 14% rise on the previous 18 months. British companies created 422,524 jobs in India since 2000. Around 6% of all employees in British businesses in India are women, with 5% of managers in these firms being female.
The main reasons British firms are attracted to India are the fact it is a huge and growing market with an expanding middle class, the easy availability of talented workers and the Modi Government’s ease of doing business policies and reforms, such as the introduction of the Goods and Services Tax.
Shehla Hasan, CBI India Director, said:
“It’s fantastic to see the economic relationship between the United Kingdom and India blossoming. Whether it’s the fact the UK is the largest western investor in India or the more than 422,000 jobs created by British business since 2000, it’s clear the economic ties between our two countries are going from strength to strength.
“There’s no question that India will be a vital trading partner as the UK charts a new future outside the EU. The golden opportunities for British firms in India play to the best strengths of UK plc. – from infrastructure to healthcare to FinTech – whilst the bold economic reforms taken by Prime Minister Modi and India’s leapfrog up the ease of doing business tables make the country even more enticing to entrepreneurs and established businesses alike.
“To fully capitalise on these opportunities, British firms would like to see further progress in reducing corporate tax rates, data privacy and ease of doing business indicators like enforcing contracts or registering a property. If these steps are taken, and the UK maintains an active strategy for engagement and interaction with the Indian economy at all levels, it will remain a significant partner in India's future growth story.”
Vishesh C. Chandiok, Chief Executive Officer of Grant Thornton India, said:
“As the 6th largest economy in the world and as the most improved country on the World Bank Ease of Doing Business (EODB) Index, India is now firmly placed as a very attractive investment destination. Continued investment by British companies in India is a testimony to India’s growth as a vibrant economy. Key reforms like the Goods and Service Tax (GST), Real Estate Act (RERA) and Insolvency and Bankruptcy Code (IBC) have played a significant role in achieving this significant progress in the last 3 years.
“I believe that with a continued focus on inclusive and progressive reforms, through the use of technology, India is set to leapfrog to the 3rd largest economy and Top 50 in EODB around 2025. This should open up numerous trade and investment opportunities for mid- sized businesses from Britain, which remains a massive opportunity for future growth.”
Crispin Simon, Deputy British High Commissioner for Western India and Her Majesty’s Trade Commissioner for South Asia, said:
“The third edition of Sterling Assets adds to the already-powerful body of evidence demonstrating that the UK-India commercial and economic partnership is strong and getting stronger.
“UK companies create jobs in India – over fifty-thousand in the last eighteen months. They Make in India, with over a third of the 400-plus companies here operating in the manufacturing sector. They bring new technologies to India, with 62% of surveyed companies bringing new technologies to market here.”
British business interests in India span a broad spectrum, both in terms of firms – with growing numbers of start-ups and smaller businesses taking their place alongside larger companies – and sectors. Over half of British firms in India (56%) are in the services sector, and over a third (36%) are in the manufacturing sector. The chemicals sector has received the lion’s share of British investment in India since 2000 at $12 billion, followed by drugs and pharmaceuticals at $8.8 billion and services at $7 billion.
UK investment continues to be spread across India, with significantly more firms choosing to invest in Southern India as of late. Between August 2017 and August 2018, over two thirds of British investment (67%) went to the South India, particularly the states of Karnataka (38%) and Tamil Nadu (29%). The state of Maharashtra, with the city of Mumbai, attracted the largest share of British investment – $8.76 billion – between 2000 and 2018.
Notes to Editors:
Sterling Assets India 3: Britain meets India provides an overview of the impact of British-owned business and UK foreign direct investment on the Indian economy and highlights the commercial impact across India.