The Growing India-UK Partnership to Boost Economy

India-UK partnership to witness a new horizon of trade relations to improve economic stability, according to a report by CII and Grant Thornton Bharat.

February 21, 2021

The India-UK trade and investment partnership has grown in the post-COVID world through continued collaboration.

FDI inflow from UK to India has seen a steep rise from US$898 mn in FY2015-16 to US$1.42 bn in FY2019-20.

India’s trade in goods and services with the UK in 2020 amounted to USD 26.7 billion.

GoI is working on a 10-year 360-degree road map to further strengthen its relationship with the UK.

Over the years, India and UK have always endorsed an improved trade partnership to boost economic stability, generate jobs, collaborate and co-create for the benefit of both countries. UK is a home for large Indian diaspora of approximately 1.5 million. The Indian community in the UK has made significant contributions in several sectors such as arts, medicines, science, sports, industry, business, academia and literature, etc. Given the size of the Indian population in UK, the High Commission of India collaborated with Federation of Indian Chambers of Commerce & Industry – UK (FICCI UK) to map the dynamics of trade and business growth between the two countries.

India-UK Collaboration During the COVID-19 Pandemic

The pandemic has changed the way of doing business compelling both countries to explore new revenue streams and assess their supply chains. The India-UK trade and investment partnership has grown further in the post-COVID world through continued collaboration. 

At a time when the entire world was dealing with a shortage of surgical masks and other pharmaceutical products, India ensured that key supply chains of pharmaceutical products and surgical masks open for the UK, as both nations collaborated stringently in vaccine research, design, and manufacturing.

Strong Ties and Bright Future

The latest edition of Grant Thornton’s annual ‘India Meets Britain’ report, FDI inflow from UK to India has seen a steep rise from US$898 mn in FY2015-16 to US$1.42 bn in FY2019-20. The UK, with a cumulative inflow (2000–2020) to India estimated at USD 29.5 billion is the sixth largest investor, contributing about 6% of the total FDI into India.

The ‘India Meets Britain’ report, which is produced jointly by CII and Grant Thornton Bharat also states that India’s trade in goods and services with the UK in 2020 amounted to USD 26.7 billion.  416,121 people in India are directly employed by the UK companies. These companies paid taxes of INR 173 billion in India in 2019-20. 

In addition to a free trade agreement, mobility, and an interim trade deal, the Government of India is working on a 10-year 360-degree road map to further strengthen its relationship with the UK. 

Indian businesses in the UK are focused on five key sectors – hospitality, healthcare and pharmaceuticals, retail and wholesale, real estate and construction and food and beverage.

The fastest growing UK companies in India include Dyson Technology, Aviva Life Insurance, Diageo Business Services, RMD Kwikform, and FMC Technologies, etc. Similarly, some of the top 20 UK companies by revenue include Vedanta, Vodafone, Hindustan Unilever, United Spirits India, etc.

Companies such as G4S Group, Vedanta Resources, and HSBC Holdings feature among the top UK employers in India. Among the Indian states, Maharashtra is the top investment destination for UK companies, followed by Haryana, Delhi, Tamil Nadu, Telangana, and Karnataka.

Additionally, several small, medium, and large enterprises operating in the UK-India trade corridor, find their presence across industry sectors. For instance, Accord Healthcare Limited, Aspen Pumps, Inver House, Macalloy, Multi Trade Links Ltd, Rolls Royce, Rotolok, Zensar Technologies, etc.

Education, too, further deepens the relationship, with the UK’s long-standing status as a leading study destination for Indian students. The relationship between India and UK also has an impact on the areas of science, the arts, sports and politics.Understanding the importance of the ‘people-to-people’ connections, both countries are set to touch new benchmarks by removing trade barriers, creating jobs and encouraging innovation.