The UK has expanded its investments in India to become the largest single western investor, according to ‘India’s Sterling Assets: Britain Meets India’ report prepared by Confederation of British Industry (CBI) and Grant Thornton.
During 2000 and 2018, total foreign direct investment (FDI) which flowed into India from all channels from the UK is estimated at $50.57 billion. Of this, the UK directly invested $26.09bn in India, increasing its investment by $847 million between 2017 and 2018 representing 7 per cent of all FDI into the country, the latest report said.
Close to two fifths (38 per cent) 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 per cent and 2 per cent in FDI respectively.
“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,” said Shehla Hasan, CBI India Director, said.
“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,” Hasan added.
UK investment continues to be spread across India, with significantly more firms choosing to invest in Southern India as of late.
During August 2017 and August 2018, over two thirds of British investment (67 per cent) went to the South India, particularly the states of Karnataka (38 per cent) and Tamil Nadu (29 per cent). Maharashtra state grabbed the major share of British investment $8.76bn between 2000 and 2018.