Despite Brexit and COVID-19, Indian investment in the UK economy is growing. Anuj Chande explains how our 2021 India meets Britain Tracker points to a significant partnership in the future.
Our research identifies 850 Indian companies in the UK with combined revenues of £50.8 billion. Together, these companies employed 116,046 people and paid £459.2 million in corporation tax. All of these figures, apart from corporation tax, are increases from our 2020 report. In the current circumstances, this growth is a remarkable indicator of the scope for Indian investment in the UK and the long term future of this economic partnership.
How are Indian companies performing in the UK?
Fastest growing companies
Every year our India meets Britain Tracker, developed in collaboration with the Confederation of Indian industry, identifies the fastest-growing Indian companies in the UK. This year's tracker shows 49 companies of 850 have revenue growth of at least 10%
These companies earned combined revenues of £2.6 billion and delivered an average annual growth rate of over 40%. You can find a full list of the UK's fastest-growing Indian companies in our 2021 tracker.
Most popular sectors and locations
20 of the 49 tracked Indian companies are in technology and telecoms. This is the eighth year in a row that the sector has dominated the tracker, but since last year's report, pharmaceuticals and chemicals companies have increased from 15% to 27%. Despite continuing uncertainty over EU market access for financial services companies based in the UK, two Indian banks grew strong enough to feature in the list of fastest-growing companies.
London remains the preferred location for Indian companies, but the south is also becoming a popular region. Throughout 2020 the proportion of companies in this region rose to 16% from 11%. From a diversity perspective, over half of the tracker companies have female representation on their boards.
India continues to invest in the UK
During 2020, despite continued uncertainty over the outcome of the UK’s exit from the European Union, Indian investors continued to acquire targets in the country. They were involved in 10 acquisitions, including four in the technology and telecoms industry and two in manufacturing. Over the course of the year, Indian investors also acquired targets in the EU, completing 27 deals. The UK attracted more deals than any single EU country.
At the end of 2020, the UK and the EU signed the Trade and Co-operation Agreement. India is set to be one of the first major economies that the UK engages within its post-Brexit global Britain strategy.
In February 2021, the two countries announced an outline and pathway to Enhanced Trade Partnership (ETP). This new relationship was to be formally launched in April when the UK Prime Minister, Boris Johnson, was scheduled to visit India. Unfortunately, this visit was mutually agreed to be cancelled due to the pandemic situation in India. Instead, the two Prime Ministers plan to hold a virtual meeting to work towards a transformed India-UK partnership.
The proposed ETP looks to deliver gains for both countries as they seek to rebuild their economies and marks the first steps towards the potential creation of a comprehensive free trade agreement between them.
An enhanced partnership in 2021
In the year when India celebrates its 75th year of independence, and the UK begins to trade independently of the EU for the first time in almost 50 years, the potential future of this partnership is very exciting. The future holds enormous opportunities for both countries to cooperatively drive sustainable economic recovery after the pandemic.