A NEW report has said that British firms have invested around £140 million in India from April to June despite the pandemic.
The second annual edition of Confederation of British Industry(CBI) Sterling Access 2020 Review, has revealed that the Indian government has made significant strides over the last twelve months to improve their business environment at both national and state level.
The trade between UK and India hit £24 billion till March 2020, up by nearly 12 per cent in just one year. India invested in 120 projects and created 5,429 new jobs – making India now the second largest foreign investor in the UK, just after the US.
According to the report, India’s reforms which boosted investment are passing a key labour reform bill and plans for a new digital ‘one-stop shop’ for firms applying for licences, clearances and incentives given by central government and local states.
“Building back from the economic shock of Covid-19, prime minster Modi has made clear his ambition for India to play a bigger role in the global supply chain. In order to accomplish this further progress will need to be made, adoption of global standards, reducing technical barriers and upping the momentum on a UK-India free trade deal will be critical,” said Lord Karan Bilimoria, CBI president.
“UK-India relations have remained ironclad amidst the crisis with our top universities and businesses collaborating on a covid-19 vaccine and British firms continuing to invest around £140 million across India. As the fifth and sixth largest economies and the world’s leading democracies, UK-India trade deal is a natural fit, that has the potential to bolster our two-way trading relationship across many sectors including life sciences, IT and services.”
The key recommendations of CBI to improve the trade and business relations include adopting international standards and certification to attract foreign investment and position itself as a global exporting hub and formalising the new Joint Economic Trade Committee services working group.
The CBI also urges India to raise the FDI limit in insurance from 49 per cent to at least 74 per cent and states to carry out labour reforms to encourage international investment.
Besides, it also wants to develop new Special Economic Zones to support both manufacturing and services sectors.
“Shaped by the virus, a new and better world order is in the making. This will define the new economic order, relocation, and redeployment of capital across various parts of the world. The pandemic has provided a window to regulators to bring in new regulations, revisit the existing ones and also do away with some of them,” said Adil Zaidi, partner, Ernst & Young LLP.
“This year’s report tried to analyse how National Single Window and implementation of new labour codes will support the ‘Atmanirbhar Bharat Abhiyan’ and improve India’s competitiveness as a preferred investment destination.”