Story Highlight
– 72% of UK firms view India as a key growth market.
– 73% of firms without a presence plan to enter India.
– UK-India FTA expected to simplify business setup.
– 65% cite India’s fast-growing economy as appealing.
– 63% highlight regulation as a barrier to entry.
Full Story
A significant shift is taking place among UK businesses regarding their expansion strategies, particularly in relation to India, as highlighted in a recent report by Grant Thornton. The ‘International Business Report’ (IBR) reveals that 72% of UK companies now regard India as a vital market for global growth, a notable increase from 61% in the previous year. Currently, 28% of these businesses have established operations in India; however, among those without a presence, 73% are planning to enter the market, with 13% aiming to do so within the next year.
Anuj Chande, partner and head of the South Asia Business Group at Grant Thornton UK, commented on the trend, saying, “The shift we’re seeing is clear: UK mid-market businesses are no longer asking ‘why India’, they are asking ‘how soon’.” He added that the imminent UK-India Free Trade Agreement (FTA) is a critical opportunity for firms, facilitating entry and reducing barriers.
The FTA, officially known as the Comprehensive Economic and Trade Agreement (CETA), was signed during Prime Minister Narendra Modi’s visit to the UK in July. Once ratified by the UK Parliament, it is set to significantly enhance the existing £44.1 billion trade relationship, streamlining business operations, lowering costs, and easing the movement of labor across borders, particularly benefiting sectors such as information technology, finance, and consulting.
The report outlines the factors that contribute to India’s attractiveness to UK firms, noting that 65% appreciate the rapid growth of the Indian economy. Additionally, 60% see the large consumer base as a compelling reason to invest. The availability of skilled talent is also a significant factor, with 53% of respondents highlighting India’s substantial pool of qualified professionals, particularly in technology and professional services.
Presently, 667 British businesses operate in India, contributing £47.5 billion in revenue and employing more than 516,000 individuals. However, challenges remain; 63% of UK firms cite regulatory hurdles and foreign exchange restrictions as major obstacles, while 38% have expressed concerns over infrastructure weaknesses and market fragmentation.
The report also points to a reciprocal interest from Indian firms in the UK, with 99% of those already established intending to expand, and nearly 90% of those not currently present planning to set up operations.
Ultimately, the analysis suggests that the India-UK FTA, in conjunction with strategic partnerships and local knowledge, has the potential to transform trade and investment patterns, placing India at the forefront of UK businesses’ expansion plans globally.
