- Indian companies became the UK's second-largest job-creating foreign investors in 2025-26.
- They launched 93 investment projects, creating 12,687 jobs across the UK.
- Experts believe the India-UK Comprehensive Economic and Trade Agreement (CETA) could accelerate investment in technology, manufacturing and financial services.
India-UK investment ties are gathering momentum even before the India-UK Comprehensive Economic and Trade Agreement (CETA) comes into force on July 15, with Indian companies emerging as the UK's second-largest job-creating foreign investors during 2025-26.
According to data from the UK's Department for Business and Trade, Indian businesses launched 93 foreign direct investment (FDI) projects, creating 12,687 jobs across the country. Only the US ranked higher, generating 15,796 jobs through 239 projects, while Germany, France and the Netherlands followed behind India.
The figures suggest that investment between the two countries was already strengthening before the trade agreement, with analysts expecting the pact to encourage even more companies to establish operations in each other's markets.
Trade deal expected to strengthen investment flows
The India-UK Comprehensive Economic and Trade Agreement will provide duty-free access for nearly 99 per cent of Indian exports to the UK while expanding market access across 137 services sub-sectors. Businesses expect the agreement to make cross-border investment more attractive by improving market access and creating greater regulatory certainty.
The UK is also becoming an increasingly important destination for Indian overseas investment. Between May 2025 and May 2026, Indian companies announced 830 overseas investment projects in the UK, making it India's fourth-largest overseas investment destination after the US, UAE and Singapore.
Investment activity had already accelerated before the agreement was finalised. Earlier in 2025, the UK government announced a pipeline of Indian investment projects, including Aaseya Technologies, Time Cinemas and Novigo Solutions, reflecting growing business confidence in the UK market.
New sectors expected to drive growth
Financial services, insurance and business services continue to account for the largest share of India's overseas investment, followed by wholesale and retail trade and manufacturing.
However, industry experts believe the trade agreement could broaden investment into newer sectors. Pallavi Bakhru, Partner at Grant Thornton Bharat, reportedly said digital technology, fintech, advanced manufacturing, healthcare, medical devices, professional services and clean energy are likely to emerge as major investment opportunities as businesses benefit from improved market access and closer supply chain integration.
Industry groups also expect British investment into India to increase. Nirmal K. Minda, President of ASSOCHAM, reportedly said lower tariffs, simplified customs procedures and stronger support for digital trade should create a more predictable business environment for UK companies. He added that Britain's businesses are likely to expand investment in India because of the country's strong economic growth and large consumer market.
With the trade agreement set to take effect on July 15, both governments are hoping stronger trade ties will translate into sustained two-way investment, creating jobs and opening new opportunities across high-growth sectors in both economies.
