The seventh annual edition of the Grant Thornton India meets Britain report highlights the significant contribution Indian companies made to the UK economy over the last year. The 2020 report, published by leading business and financial adviser Grant Thornton UK LLP in collaboration with the Confederation of Indian Industry (CII), analyses data from almost 850 UK-incorporated limited companies owned or controlled by Indian interests and provides a complete view of the landscape of Indian investment into the UK.
Key findings include:
- Total number of Indian companies in the UK: 842 in 2020 and 842 in 2019
- These companies have a total turnover of £41.2 billion, compared to £48 billion in 2019*
- Indian companies employ 110,793 employees (increased from 104,783 in 2019)
- Together they paid almost £462 million in corporation tax compared with £684 million in 2019 and £360 million in 2018
Anuj Chande, Partner and Head of South Asia Group at Grant Thornton UK LLP, commented:
“The past year has brought significant international and domestic challenges for both India and the UK. Yet as the global economy slows, the economic connection between the two countries is as strong as ever.
“The COVID-19 pandemic has diverted attention from the UK’s ambition to negotiate a trade deal with India. Nevertheless, a deal is still very much a priority for the UK post-Brexit. The UK government has named India as one of its top targets for a free trade agreement. Reflecting this, Mumbai was among 18 cities targeted by a new GREAT ‘Ready to Trade’ campaign, which the UK government launched the day after the UK’s formal departure from the European Union.
“While a UK-India trade deal will take time to negotiate and the full opportunities will not emerge for some time, the UK will continue to provide an excellent environment for international businesses and offer many benefits to Indian investors, not least access to a diverse, multicultural talent pool and strong cultural connections through the Indian diaspora. In addition, the depreciation of the pound continues to make the UK a particularly favourable investment destination.
“As we rebuild the UK economy in the months to come, Indian owned businesses already operating here will continue to play an important role. We anticipate new Indian investments as both the UK and Indian economies start to re-emerge from the shadow of this pandemic. The most successful Indian businesses look at their UK investments from a long-term perspective and not for short-term gains.”
The 2020 India meets Britain report also provides a tracker of the fastest growing Indian companies in the UK, as measured by those with turnover of more than £5 million, year-on-year revenue growth of at least 10% and a minimum two-year track-record in the UK.
This year, 72 companies met the qualifying criteria and feature in the 2020 Tracker, achieving an average growth rate of 40%, compared with 36.83% in 2019.
Green energy investor takes the top spot
The fastest-growing Indian company in the UK in this year’s Tracker is from the energy sector. Energy Efficiency Services Ltd (EESL) was set up by the Indian Government’s Ministry of Power to create and sustain markets for energy efficiency in India. The company is committed to investing £100 million in the UK over three years to promote and implement low-carbon, energy-efficient, renewable energy solutions. EESL EnergyPro Assets Ltd, a JV founded by the company, made several acquisitions in 2019 resulting in a growth rate of 715%.
Technology and telecoms companies dominate the top ten
Technology and telecoms companies have dominated the Tracker since 2014. This year was no different. Companies from this sector account for 38% of Tracker companies and took five of the top ten places. Route Mobile UK (number 2 with 202% growth), Dhoot Transmission (UK) Ltd (number 3 with 186%) and Incessant Technologies (number 9 with 81%) have all featured in the Tracker before. Newcomers in this year’s top ten are Evolutionary Systems Co Ltd (number 4 with 142%) and Rategain Technologies Ltd (number 7 with 105%).
The report anticipates that technology and telecoms companies will continue to dominate the Tracker for a number of years, with the next wave of Indian technology companies, such as ride-sharing company Olacabs and Brilliant Basics, a design technology business, stepping in to join the traditional Indian IT service providers.
Over half of Tracker companies located in London
London remained the dominant region for Tracker companies in 2020, a position the capital has held since 2015. 54% of Tracker companies are based in London, with the number choosing the capital as their base growing for the sixth consecutive year.
The North improved its showing in 2020 with 14%, up from 11% in 2019 and 2018. This may be evidence of the UK’s efforts to develop a ‘Northern Powerhouse’ starting to bear fruit.
Minister for Investment, Gerry Grimstone said:
“The report showcases the continued strength of UK-India trade and the importance of India as one of our most critical bilateral investors and job creators, supporting over 100,000 jobs, with half of them outside London.
“More trade is essential if the UK is to overcome the unprecedented economic challenge posed by Coronavirus. The crisis has shown us the importance of keeping trade flowing and building diverse supply chains that are robust in a crisis.
“Investment will be key to ensuring a strong economy in the years to come, boosting productivity and creating jobs, and it is our strong trade relationships with partners like India that will support this.”
The Former High Commissioner of India to the UK, Mrs. Ruchi Ghanashyam, said:
“I am delighted to note that Indian investment into the UK remains robust and it continues to generate record jobs for the UK. The overall numbers of Indian contribution if you include the Indian diaspora contribution is significant and I can only foresee this rising in the years to come.”
Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), said:
“These are unprecedented times for us as Indian industry, globally. As we navigate through the challenges posed by this sudden disruption caused by the pandemic, it is a useful reminder to note and underscore the valuable contribution of the Indian industry in the UK economy.”
Lakshmi Kaul, Head & Representative – UK, Confederation of Indian Industry (CII), added:
“The India Meets Britain tracker is a reminder of the value that Indian companies add locally, not just in investment terms but more importantly in jobs terms. In the recent weeks, one has seen how India has stepped in and stepped up, beyond its usual business remit to support on ground in dealing with the pandemic. Whilst the urgent need has now become to address the pandemic, Indian industry will continue to be UK’s ally in navigating its way past Brexit.”
*The decline in combined turnover is attributable to the late filing of accounts for one company. If 2018 figures were used, combined turnover would rise to £47.1 billion