UK and India: Forging partnerships for the future

The India-UK economic relationship is an important one, and would continue to go from strength to strength as the UK exits from the EU, according to the Confederation of Indian Industry (CII). CII reaffirms its commitment to building trade and investment ties and positively enhancing business linkages with the UK. There is an increasing level of Indian investment into the UK, and many of these Indian businesses are doing extremely well. A recent Grant Thornton/CII 'India Meets Britain' report noted that the number of Indian companies growing at over 10 per cent per year in the UK has jumped to 62 from 36 in the previous year. Telecom and technology companies have achieved phenomenal growth, for example HCL Technologies recorded a growth of 728 per cent. The report, which monitors fast-growth Indian businesses operating in the UK, shows that the combined turnover of these businesses has increased by £4 billion in the last year, up from £22 billion in 2014 to £26 billion in 2015. The year 2015 saw investments from India rise by 65 per cent, making it the third largest source of FDI in the UK. In fact, India invests more in the UK than in the rest of Europe combined. This impressive performance can be attributed in part to the high-growth sectors in which many of them operate - notably technology & telecom (32 per cent of high-growth Indian firms in the UK), and pharmaceuticals and chemicals (19 per cent). However, new initiatives by the pro-business Indian government have also fostered trade between India and the UK. Half of those companies included in the tracker, recorded over 30 per cent growth. With world class universities, vibrant business sectors, and long term infrastructure investment, more Indian companies have joined their peers on the 2016 list tracker. However, to sustain this growth in business expansion, there is a need to address the concerns of Indian companies around talent mobility issues and their impact should be minimised. There are also UK businesses investing and succeeding in India. Recent UK government figures show that UK Trade and Investment (UKTI) supported British companies in undertaking £5.1 billion worth of deals in India in 2015-16. Several large UK corporations have been operating in India for a long time and have created strong local brand loyalty, and many more have followed suit. India accounted for 17 per cent of the UK's foreign direct investment (FDI) projects recorded in 2013-14, creating 4,482 new jobs. Vodafone is stepping up its investments in India to the tune of £1.3 billion to further improve its capacity to meet customers' needs. Other examples of UK investment in India include Perkins Engines, which is opening a state-of-the-art £100-million manufacturing facility in Aurangabad to make in, and export from, India, and the health food chain Holland and Barrett's £20-million investment into a partnership with Apollo Hospitals to open up to 1,000 stores in India. We believe that there exists significant potential for India and UK to further strengthen bilateral economic ties given that India today represents the world's fastest growing large economy with stable and sound macroeconomic indicators. Let me highlight a few areas: Advanced Manufacturing: With the Indian government rapidly simplifying bureaucratic procedures, instituting market reforms and implementing fair, effective, and transparent processes to attract foreign investments, cooperation and investment from UK in manufacturing in India will create a win-win situation for both. Industries such as Defence, Automotive and Pharmaceuticals provide good opportunities for British companies. Start-ups: We feel that technology companies from the UK can explore the vibrant new start-up environment that has emerged in India. It is estimated that since 2010, start-ups have generated close to $3 billion worth of funding and India has emerged as the fourth largest global market for start-ups. With less than 400 start-ups during the year 2010-11, India today is home to over 5,000 start-ups of various sizes. Given this development, there has been a large growth in foreign direct investment (FDI) in India's start-up sector and this trend is only going to increase in the future. Joint R&D: There is a need for broader and deeper cooperation between India and the UK in fields of science and technology, R&D, and innovation, since efforts in these areas will increasingly define the path of economic development in coming years. It is very encouraging to see the political drive and willingness on both sides to increase collaborative working between businesses. Given the positive economic outlook for India and the efforts of our governments to build confidence in the potential for partnerships, we believe it is the best era for our industry to collaborate, especially in the areas of focus above. Chandrajit Banerjee is the Director-General of the Confederation of Indian Industry (CII).