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UK Businesses Perception Of Corruption As Barrier To Operate In India Halved Since 2015: UKIBC Report

The UK India Business Council Ease of Doing Business Report, released on Monday (19) today, highlights that UK businesses’ perceptions of corruption as a barrier to operating in India has halved since 2015.

Based on an in-depth survey of businesses with a combined turnover of $122 billion, the report found only 25 per cent of UK businesses saw corruption as a major barrier in 2018, as opposed to 51 per cent in 2015. The drive to digitalise government interactions was cited as a major factor behind this as it has led to reduced face-to-face interactions where corruption is most likely to take place.


Another key finding was that a remarkable 46 per cent of UK businesses responding had plans to expand their investments in India in the next 12 months. Moreover 25 per cent of those responding intend to direct this new investment eastwards, seeking new opportunities in states such as West Bengal, Assam, Meghalaya, and Manipur.

The roll-out of GST was also cited as a contributor to the improved operating environment with those optimistic about the reform doubling on 2017, overturning initial caution around its implementation in last year’s report.

This year on, seven of the seventeen indicators for improvement, more respondents thought progress was being made than at any other point since the UKIBC launched the project in 2015 with the most progress made in the presence of quality infrastructure and telecommunication facilities.

Richard Heald, OBE (Chief Executive of UKIBC) said that “this report not only highlights the state of the UK-India trade and investment relationship, it also underscores the positive steps being taken to make India a valued partner and destination of UK businesses. If anything, the improvements in ease of doing business further highlights the scale and geographic range of the opportunities for UK businesses within supply chains and across sectors. With BREXIT imminent, India represents an increasingly important and increasingly attractive market.”

There is, of course, still room for improvement in important areas. Most notably in the “quality of bureaucracy” which saw little improvement. This matters as 47 per cent of respondents cited quick approvals and effective bureaucracy as one of their most important factors when deciding where to invest. While it is recognised that it will take time for reforms introduced at the top of government to filter to every corner of the Indian bureaucratic machine, UK investors would like to see continued efforts to improve this aspect of the operating environment across states.

More than those from any other country, UK businesses are increasingly investing in India. Since 2000, the UK has been the largest G20 investor in India, investing £17.5bn and creating 371,000 new jobs, representing 10 per cent of all FDI-related jobs in that period.

British companies in India now employ almost 800,000 people, representing an impressive one in 20 jobs in India’s organised private sector.

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