LONDON, United Kingdom. The latest data to confirm Britain’s increasing interest in investing in India will make PM Narendra Modi happy a couple of months before he embarks on his maiden visit to the United Kingdom.
The UK has become the largest investor in India among all G20 countries with combined revenue of more than $54 billion in India.
Between the year 2000 and 2015, UK’s FDI into India amounts to $22 billion – 9% of all FDI in the country.
In total, G20 nations invested $ 73.9 billion in India between 2000-2015 with the UK being the single largest G20 investor into India followed by Japan ($ 18.3 bn), the US ($13.7bn), Germany ($ 7.6 bn) and France ($ 4.5 billion).
As India’s largest employer, UK firms employ around 691,000 people across the country – 5.5% of total organized private sector jobs in the country. Between 2000 and 2015, UK FDI generated around 138,000 direct jobs, 7% of the total 1.96 million jobs generated by FDI in India.
India’s massive talent pool was the main reason for 63% of the British companies to believe in India’s potential while India’s recent growth story made 86% of them turn to interest towards the Asian giant. English being an official language has helped, too, with 53% of the companies relying on it while 40% said it was the country’s stable government.
Confederation for British Industry’s first Sterling Assets India report sponsored by PwC UK and brought out in association with the UK India Business Council says that Maharashtra and Delhi have attracted the bulk of Britain’s FDI into India – 26% and 20% respectively.
The chemicals sector attracts the lion’s share of British investment in India, at $5.78 billion (26% of UK FDI), followed by the pharmaceutical sector at $3.76 billion (17% of UK FDI) and the food processing sector at $3.05 billion (14% of UK FDI).
Katja Hall, the confederation’s deputy DG, said, “The economic relationship between India and the UK is in fine fettle. The UK has played a significant role in India’s growth journey, investing more and creating more jobs than any other G20 nation. PM Modi’s steps to improve the ease of doing business in India are a great boost and we look forward to the EU-India FTA talks resuming.”
British prime minister David Cameron recently asked Modi to help “the EU-India free-trade agreement get going again” and “for structural reform in India to help open up her economy and lead to higher growth rates”.
Cameron met the Indian PM on the sidelines of the G-20 Summit in Brisbane recently. Modi met an EU delegation who conveyed that the 28-nation bloc is keen to “re-engage” with India on trade”.
Cameron had said “I had a very good meeting with PM Modi. We discussed the need for the EU-India free-trade agreement to get going. I am clear that PM Modi is a man with a clear vision for doing economically for his country what he succeeded in doing for Gujarat”.
Mukesh Rajani, India Business Group Leader at PwC UK said “The UK has been one of India’s largest investor for decades. But with Japan and other territories rapidly increasing levels of direct investment in the last few years, this advantage is by no means guaranteed”.
According to the findings, UK is a close second (after the USA) in generating service sector jobs in India, with an estimated 43,000 positions created.
CBI says “India remains a hugely attractive investment destination for British companies and several of them are now household names in India. It is easy to guess why. India is Asia’s third-largest economy. The sheer size of the domestic market – fuelled by growing purchasing power and size of the Indian middle class, successive democratically elected governments, a vast pool of talented workforce, a legal and educational system rooted in British tradition and English as an official language – are some of the many factors that have attracted and retained British investments in India”.
According to United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2015, India acquired ninth slot in the top 10 countries attracting highest FDI in 2014, moving up six places compared to last year.
The report to be made public on Wednesday says India has historically attracted FDI directly and indirectly through a number of international business centres. FDI from UK-headquartered companies constituted $4.4bn of the top 25 investments from these centres.
Credit: The Times of India
