India (Commonwealth Union)_ India’s rise as a global force has coincided with a striking trend: the increasing footprint of Indian enterprises in international markets. Among these destinations, the United Kingdom emerges as the most preferred investment hub for Indian businesses. While the allure of India’s vast and affluent middle class has historically drawn UK investors, there has been a noteworthy shift. Now, Indian companies are targeting the UK for its market potential, aiming to leverage it as a springboard into broader international markets, notably the US and EU. Accordingly, the number of Indian-owned firms operating in the UK has surged to an unprecedented 971, marking a significant increase from 954 the previous year, as per the latest research findings.
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Why invest in the UK?
The UK continues to offer compelling incentives for Indian investors, including a shared business language, access to high-quality education, and strong brand appeal. Moreover, the substantial Indian diaspora in the UK serves as an additional catalyst, fostering a sense of familiarity and support for Indian companies establishing roots in the region. Beyond geopolitical considerations, the UK’s stature as a financial powerhouse and favorable business policies, coupled with its advanced technology and robust market dynamics, have magnetized Indian investments. For Indian firms, the UK represents a gateway to global markets and a pivotal center for research and development, enabling them to capitalize on the advantages of a developed economy. These strategic investments aim to utilize the existing market positions of acquired entities in their respective domestic markets to facilitate international expansion.
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Influence of Diaspora
The significant Indian diaspora in the UK acts as a living bridge between the two nations, underpinning a mutually beneficial partnership. Additionally, shared linguistic ties, cultural integration, and political affinities further bolster the UK’s appeal to Indian investors. Further, the ongoing negotiations for a free trade agreement (FTA) between India and the UK could potentially unlock new avenues for prosperity and collaboration.
List of Indian companies in UK
Several prominent Indian corporations have become major employers and economic contributors in the UK. For instance, Jaguar Land Rover, Tata Steel Europe Ltd, Automotive plc, Firstsource Solutions UK Ltd, Airtel Africa plc, and HCL Technologies UK Ltd are among the leading Indian-owned entities in the UK, collectively employing approximately 100,000 individuals over the past decade. Other fast-growing Indian companies in the UK are HCL, ICICI Bank Limited, Infosys Technologies Limited, MindTree Consulting, Rolta India Limted, Sundaram Fasteners Limited, Tata Consultancy Services, Thermax Limited, United Phosphorus Limited, VIP Industries Limited, Wipro Limited, Wockhardt Limited, Reliance Industries, Tata Group, WiPro, Infosys, Tata Chemicals, LT Foods International Global of LT Foods; St James’ Court Hotel St James’ Court, which falls into the Taj Hotels group; Reliance Big Entertainment (UK) Global of Reliance Innoventures; Norlake Hospitality Global of Bharti Enterprises; Royal Enfield UK Global of Eicher Motors; Bird Overseas Holdings Global of Amadeus India; GH Holdings of Bharti Overseas; Sudhir Power (UK) of Mr Rahul Seth; KStrong Holding UK of Karam Holding; Essar Energy Global of Ruia Family, and many other companies.
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Investment giants
Reliance Industries exemplifies India’s strategic approach to UK investments. The conglomerate’s acquisitions of Faradion Limited and Hamleys underscore its global expansion strategy, focusing on technology, innovation, and market diversification. Similarly, Tata Group’s acquisitions of Tetley and Jaguar Land Rover have solidified its position as a global player in tea production and automotive technology, respectively. In the IT sector, companies like WiPro and Infosys have expanded their footprint through acquisitions like Capco and Brilliant Basics, enhancing their technological capabilities and market presence in the UK.
Reliance Industries
Reliance Industries, a diversified conglomerate and one of India’s largest corporations, has made significant acquisitions in the UK market. Notable examples include the acquisition of Faradion Limited, a global battery technology company, and the renowned British toy-maker Hamleys. These moves underscore Reliance’s international ambitions and its strategic drive for market expansion.
Tata Group
Tata Group, long known for its British acquisitions, plays a major role in deepening economic ties between India and the UK. Acquisitions such as Tetley, which positioned Tata as a global leader in tea production, and the automotive giants Jaguar and Land Rover, underscore its strategic focus on advanced technology in the automotive sector. Tata Chemicals’ investments in Cheshire Salt Holdings and OakNorth Bank further demonstrate its diversified footprint in the UK market.
WiPro and Infosys
In the IT sector, Wipro and Infosys have made significant strides in the UK market. Accordingly, Wipro’s purchase of Capco, a London-based consultancy firm, and Infosys’ acquisition of Brilliant Basics underscore their ambitions to expand their technological expertise and market presence in the UK.
In a recent development, the UK’s Vodafone Group sold an 18% stake in India’s Indus Towers, exceeding initial plans, with Bharti Airtel acquiring shares to raise its stake to nearly 50%. This transaction reflects ongoing dynamics in telecommunications investment between India and the UK.
Dominant Sectors
Indian-owned companies in the UK are thriving, particularly in sectors such as technology, media, and telecommunications, which constitute 27% of the fastest-growing firms. Manufacturing and engineering follow closely at 20%, with pharmaceuticals and chemicals at 16%. The Hospitality and leisure sector has also shown significant growth at 10%, Automotive 7%, the financial services sector 6%, Energy 5%, Business services 4%, Food and beverage 3%, Retail 1%, Real estate 1% of the fastest-growing companies. Further, London continues to be the top choice for the fastest-growing companies, with more than half of this year’s fastest-growing Indian companies situated there. This underscores London’s status as their preferred location in the UK capital, despite increasing interest in other regions as well.
Current developments and challenges
Despite global economic uncertainties exacerbated by geopolitical tensions surrounding Brexit and the COVID-19 pandemic, Indian companies continue to thrive in the UK, participating in substantial acquisitions across various sectors. The resilience shown by these firms underscores their pivotal role in driving economic growth, contributing to GDP, and creating employment opportunities in the region.
Economic benefits
Indian companies are pivotal to the growth of the British economy, contributing significantly to GDP and employment. With 971 Indian-owned companies generating a combined turnover of £68.09 billion, paying a total tax of £1.17bn, and employing 118,430 people, their impact on the UK economy is substantial. These businesses also contribute to the UK’s gender equality, by employing 21% of female directors on the board. Further, with the burgeoning Indian economy and its robust, educated youth resources, coupled with the rise of the AI revolution and clean energy, Indian investment in the UK is set to bloom to a great extent in the future.
Growth of Indian companies in UK
Indian companies in the UK have shown remarkable growth, with a record number achieving revenue increases of over 10%, and top performers averaging nearly 50% annual growth. This underscores India’s significant impact on the UK economy, as it emerges as a leading source of foreign direct investment. As of 2021, India ranked second in FDI for the UK, with investments across 99 projects generating substantial employment and billions in revenue. The UK has increasingly become a favored hub for Indian businesses, contributing to both countries’ ambitions on the global stage. Despite pauses in negotiations, bilateral trade between the UK and India surged, exceeding £38 billion in 2023, marking India as the UK’s 12th largest trading partner. Further, ongoing talks for a free trade agreement aim to further boost trade volumes, potentially surpassing $100 billion by 2030, leveraging the economic strengths of these two major global economies.
Future outlook
As India’s economic influence expands, so too does the presence and impact of Indian-owned enterprises in the UK. Forecasts suggest India could become the world’s fastest-growing economy by 2024, positioning it as a pivotal player in global economic dynamics. This trajectory bodes well for further strengthening of India-UK ties, marked by deepening economic cooperation and sustained bilateral trade growth.
India-UK ties
The growing number of Indian companies in the UK reflects deepening ties between the two nations over the past decade. Accordingly, bilateral trade has drastically increased from £16.4 billion in 2013 to £35.9 billion in 2022, underscoring the growing economic partnership. Recent diplomatic initiatives, including agreements in May 2021 and joint statements in April 2022, signify a formalized framework for future UK-India relations. Prime Minister Rishi Sunak’s visit to India in September 2023 for the G20 summit further underscored commitments to strengthening bilateral ties, particularly in defense technology, trade, and innovation.
India, with a GDP approaching $3.3 trillion, and the UK, as a recognized developed economy with a similar economic scale, have seen Indian companies increasingly channel substantial investments into the UK. India’s burgeoning investments in the UK reflect a strategic alignment of economic interests between two nations with distinct economic profiles. Despite the economic gap, Indian investments in the UK carry significant strategic implications, fostering cultural ties and enhancing market access for Indian businesses. This trend not only underscores India’s growing economic prowess but also highlights the resilience and diversity of its business landscape on the global stage.
