Covid and Brexit notwithstanding, trade and investment between India and UK flourish
Despite the challenges posed by Brexit and a global pandemic, trade and investment between India and UK has seen an upward trajectory, with India continuing to be the biggest investor into the UK, and British companies looking to India for collaborations and partnerships.
Companies across financial and business services, creative, urban and life sciences sectors are choosing London because of its reputation as an open and welcoming city, as well as being the global financial centre. London also offers both startups and established firms the right ecosystem to support them in their global expansion plans.
Investment prospects for Indian companies
According to a recent report by DIT (Department of International Trade), India is the second largest source of Foreign Direct Investment(FDI) for UK for the second time in a row, with Indian companies having invested in at least 99 projects in the country.
The India meets Britain Tracker, developed by Grant Thornton in collaboration with the Confederation of Indian industry (CII), that identifies fast-growing Indian companies in the UK, shows that in the last financial year, more than 50 percent of companies chose London as their headquarters. These companies earned combined revenues of £2.6 billion, and delivered an average annual growth rate of over 40 percent.
As well as an abundance of opportunities for Indian companies in the UK, there is also strong interest from companies in the UK to invest in India as a springboard for global expansion.
For example, Tide, a British fintech company, recently announced they are expanding into India, and will create more than a thousand jobs.
Creation of jobs
The number of Indian companies operating in the UK and the jobs created by them have both registered growth despite the pandemic and Brexit. According to the London Meets UK tracker, there are 850 Indian companies in the UK employing 116,046 people. Another report by DIT states that Indian companies have created 4,830 new jobs in 2020-2021.
In May 2021, the UK and Indian governments announced new trade and investment deals worth $1 billion. These include $533 million in new investment from India to UK, expected to create about 6,000 new jobs. The deals also include $240 million in investments by Serum Institute of India, with 1,000 new UK jobs each in health and tech firms Infosys, HCL Technologies and Mphasis and 500 jobs at Wipro.
Fintech has been the largest growing sector in the UK. As per a recent report by Dealroom.co and London & Partners, UK-based fintech firms have already raised more VC investment in the first six months of this year than the total amount raised in the whole of last year.
London is also home to 3,018 fintech companies, more fintechs than any other city globally. As the biggest global fintech cluster, the UK capital is producing some of the world’s fastest growing fintech companies.
Another sector that has been witnessing an upward trend is the life
sciences and medtech sector, which has increased from 15 percent to 27 percent since last year. Investment in the edtech space has also been on an incline. In 2020, London was the top city in Europe for edtech VC investment, followed by Paris, while the UK also took the top spot in Europe. London is home to the highest proportion of edtech firms in the UK, with over 500 startups.
Strong cultural links
India and the UK are also natural partners for collaboration due to strong cultural ties. London houses a large Indian diaspora with British Indians making up the largest ethno-national group in London.
Last year also saw London welcome the highest number of international students on record with India replacing the US to become second biggest international student market for London. India has been seeing strong growth year-on-year with 87 percent increase. Higher Education Statistics Agency (HESA) data reveals 13,435 Indian students are enrolled at British universities, up from the previous year’s 7,185 students.
These strong business and cultural links provide a great foundation for a long-term relationship between India and the UK. As we look ahead, both countries will continue to focus on forging even deeper ties in areas of trade and investment, with opportunities for companies to do business across both regions.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)