India and the UK share strong historical ties and a multifaceted relationship, especially in the areas of trade and investments. The India-UK partnership has strengthened over the years and was upgraded to Strategic Partnership level in 2004. The Partnership aims to expand cooperation across priority sectors such as defence, space, science and technology, civil nuclear energy, and education, among others.
Over the last 5 years, India’s trade in goods and services with the UK expanded from around US$ 22 billion in 2015 to US$ 27 billion in 2020. On the investment front, UK is India’s sixth largest investor with a cumulative investment of around US$ 30 billion, constituting around 6% of total foreign direct investments (FDI) to India. Further, India is among the top largest foreign investors in the UK. Another defining feature of the UK-India partnership is the strong presence of the Indian diaspora in Britain.
Given these complementarities, Governments of both sides are exploring opportunities for giving a further impetus to the relationship. The rapidly changing geopolitical landscape over the past few years as well as Brexit are set to enable both sides to deepen engagement further.
Even amidst the many adversities during the Covid-19 pandemic, the India-UK partnership strengthened further through continued collaboration, especially in the area of vaccine research and manufacturing. In the current situation, increasing investments in each other’s market has become an imperative for supporting growth for both economies. While many British companies exist in the Indian manufacturing sector generating significant employment, India is viewed by the UK as a preferred investment destination with a large domestic market, a growing middle class and a skilled workforce.
Given this backdrop, the first edition of the Britain Meets India Report, developed by Grant Thornton Bharat, in collaboration with the Confederation of Indian Industry (CII) and UK’s Department of International Trade (DIT), with the help of comprehensive data, has identified the largest and fastest growing UK companies that contribute significantly to the Indian economy. The Britain Meets India report has identified 572 UK companies in India, with an estimated turnover of INR 3,390 billion in 2019-20. The total tax paid by these companies during the same period is estimated to be around INR 173 billion.
The key findings of the report reveal that 91 of the 572 companies have turnover greater than INR 500 million and growth above 10%.
The report also analyses the geographical dispersion of these companies and finds that the industrial sector leads the chart, constituting around 22% of the companies in the growth tracker, followed by business services (21%), technology (13%), consumer, retail and e-commerce (10%), financial services (5%) and pharmaceuticals (5%), and others.
Maharashtra and Delhi NCR are found to be the leading investment destinations for UK companies. More than half of the companies are located in Maharashtra (22%), Haryana (18%) and Delhi (18%), followed by others including Karnataka, Tamil Nadu, Telangana, Gujarat, etc.
More than 4 lakh employees are estimated to be working in the UK companies in India. 12 out of the 23 companies in India each employ over 1,000 people domestically. GS4 Ltd. is found to be the largest UK employer in India, with around 1.35 lakh employees, followed by Vedanta Ltd. with 79,378 employees.
In terms of gender diversity, 60 out of the 572 UK companies in India have at least one women director. Among the 91 fastest growing companies in India, 16 companies were found to have women directors on their board.
With Brexit opening up significant opportunities for both sides and both economies looking to step up cooperation in the Indo-Pacific region, the outlook for UK investments in India looks positive. As a new strategy has been formed by the UK for increased collaboration over the next 10 years across diverse areas including trade and investments, health and climate, etc. and significant potential across other areas such as the digital economy, data regulation and interoperability, new horizons are evident.
CII with its office in London and its wide range of institutional partners in the UK helps businesses of both countries to come together to leverage fresh business ventures. This report complements the CII-Grant Thornton report ‘India Meets Britain’ which has been brought out regularly to track the operations of Indian companies investing in the UK.
Given an evolving new trade partnership between both sides that focusses on removing trade barriers, job creation and encouraging innovation, India will continue to enhance its position as a major investment destination for the UK.