Britain beat off tough competition from Japan to hold on to its position as the largest G20 investor and biggest job creator in India, a new report revealed.
Between 2000 and 2016, the UK invested $24.07 billion in India and created 371,000 jobs, the Confederation of British Industry (CBI) finds in its 2017 'Sterling Assets India' report. Japan by comparison invested around $23.76 billion, followed by the US at $19.38 billion as the top G20 investors into India. “The top reasons British firms invest in India are the size and growth potential of the market, the easy availability of talented workers and the stable political system,” it notes.
The analysis, supported by PricewaterhouseCoopers (PwC) and UK India Business Council (UKIBC), found that Britain had increased its investment into India by $1.87 billion between 2015 and 2016, representing 8 per cent of all foreign direct investment (FDI) into the country.
“These figures reflect the thriving commercial links that Britain's businesses - large and small, and from a whole host of sectors - have built in India, and which the Prime Minister saw on her first visit outside the EU [in November 2016],” said Carolyn Fairbairn, CBI Director-General.
“From strengthening the UK's leading position as the largest G20 investor in India to being the biggest Indian job creator through direct investment, it's clear the country is a magnet for British firms... Further reductions in India's corporate tax rates and improvements to the ease of doing business will see the relationship between India and the UK go from strength to strength,” she said.
The chemicals sector receives the lion's share of British investment in India at $6.1 billion (25 per cent of UK FDI), followed by drugs and pharmaceuticals at $4.1 billion (17 per cent) and food processing at $3.2 billion (14 per cent). The total number of people employed by British companies in India currently stands at 788,000, representing 5.3 per cent, or one in 20, of private sector jobs.
Kevin Burrowes, executive board member and head of clients and markets at PwC UK, said the findings offer a good base for India-UK ties to build on in a post-Brexit era.
“India offers excellent opportunities for UK businesses looking to engage in a fast-growing emerging economy. Building ever closer business ties with India will be critical, especially at this current time, given the changing global and European stage,” he said.
“It is encouraging to see that confidence among British and Indian business leaders has increased in comparison to last year. According to PwC's latest CEO Survey, 75 per cent of Indian CEOs are 'very confident' about their company's prospects for revenue growth over the next three years, compared to 41 per cent globally, adding to India's attraction as a place to invest,” he added.
UKIBC chair Patricia Hewitt described the findings as a sign of the UK “solidifying” its place as the number one G20 investor and job creator in India through FDI. She said: “The Indian government's efforts to improve the business environment are clearly bearing fruit, and British businesses of all sizes and from across sectors have continued to spread right across this exciting and fast-changing market.
“As Prime Minister Modi said, the UK and India are an 'unbeatable combination'.” Delhi proved the most popular investment destination for British firms in recent months. Between April 2015 and September 2016, nearly a quarter (22.35 per cent) of British investments chose Delhi. The state of Maharashtra, with the city of Mumbai, attracted the largest share of British investment ($7.47 billion) between 2000 and 2016.
The 'Sterling Assets India' report marks the start of a series of events planned by the CBI and UKIBC on the UK-India trade relationship to take place in both the UK and India over the next two years.