India’s investments in the UK zoomed nearly 65 per cent in 2015, establishing it as the third largest source of foreign direct investment (FDI) into Britain after the US and France.
A new report released here also found that the number of Indian companies in the UK, growing at more than 10 per cent, has nearly doubled from 36 to 62 firms in a year.
‘India meets Britain 2016: Tracking the UK’s top Indian companies’, published by Grant Thornton UK LLP in association with the Confederation of Indian Industry (CII), said the combined turnover of these businesses has increased by 4 billion pounds last year, up from 22 billion pounds in 2014 to 26 billion pounds in 2015.
Anuj Chande, head of the South Asia Group at Grant Thornton UK LLP, said: “The India Tracker shows that the level of investment in the UK by Indian companies remains high. In 2015, investments from India rose by 65 per cent, making it the third-largest source of FDI in the UK.”
“The UK remains an important market for Indian companies, particularly those looking to access Europe. In addition to the strong cultural ties between the UK and India, the UK’s increasingly competitive corporate tax rates, R&D incentives and a common language make it an attractive destination for investment,” Chande said.
The report notes that to a large extent, the “impressive rates of growth demonstrated by Indian companies” reflect the fast-growth sectors in which many of them operate â€“ notably technology, telecoms, pharmaceuticals and financial services.
The top five Indian firms operating in the UK include Bharti Airtel, HCL Technologies, Emcure Pharma, Apollo Tyres and Wockhardt.
In reference to the upcoming referendum which will decide the future of the UK’s membership of the European Union (EU), the report cautioned: “At least for the time being, Indian companies invest more in the UK than they do in the rest of the EU combined. What remains to be seen is how attractive the UK will be to these businesses in light of the upcoming EU referendum and possible ‘Brexit’.”
Chande said, “The forthcoming EU referendum leaves some questions for the future of investment in the UK by Indian companies. However, the impressive growth seen in the last year is a testament to the pro-business measures adopted by the Narendra Modi government, and there is little to suggest that the UK will become less attractive to Indian investors.”
Ensuring that companies like these fast-growing firms are able to access the UK is vital in creating a vibrant UK economy,” he said.
According to the analysis, Indian companies employ almost 110,000 employees in the UK, with the automotive sector accounting for the highest number of employees at 36 per cent.
Of the 62 firms in the tracker, 30 are Small and medium-sized enterprisess with a turnover between 5 million pounds and 25 million pounds, 27 are mid-sized (turnover between 25 million pounds and 250 million pounds) and five are large corporates (turnover of above 250 million pounds).
The research also shows that Indian-owned companies pay combined UK corporate tax of almost 650 million pounds, up from 500 million pounds last year.
Shuchita Sonalika, director and head of CII UK, said: “Indian companies continue to make an impressive contribution to the vibrancy of the UK’s economy. Accelerating global ambitions of Indian corporates may well see more Indian businesses expand overseas and join the 815 Indian businesses already established in the UK.”
“With world class universities, vibrant business sectors, long term infrastructure investment, we might expect to see more Indian companies emulating the success of their peers on the 2016 list tracker,” Sonalika said.
“The 9 billion pounds in commercial deals announced during Prime Minister Modi’s UK visit last year are cause for optimism. However, to sustain this optimism in business expansion, we hope that the concerns of Indian companies around talent mobility issues are heard and resolved, and their impact, minimised,” she said.
CII promotes bilateral trade and investment flows between India and the UK, and through its India Business Forum brings together Indian companies with existing or expected operations in the UK.