Investment opportunities for the UK in India
24 February 2017
Between 2000 and 2016 the UK invested around $24 billion in India, strengthening its position as India’s single largest G20 investor and supporting close to 800,000 jobs in India. The second Sterling Assets India report, from CBI, PwC and the UK India Business Council, outlines the UK foreign direct investment already taking place in India. In this blog, we want to discuss the opportunities for investment in the future. On a changing global stage, how can the UK and India continue to work closely together, and what might the benefits of this relationship be?
A testament to the close partnership already in place between India and the UK was the fact that India was the first country outside Europe that Theresa May chose to visit after becoming Prime Minister. This sent a strong positive message about the relationship between the two countries after the Brexit vote and set the stage for future trade and investment opportunities.
Going forward, we believe more UK businesses will look to invest India and existing investors may choose to increase their current investment. The first reason for this is that confidence amongst Indian business leaders is high. According to our latest CEO survey, 75% of Indian CEOs are ‘very confident’ about their company’s prospects for revenue growth over the next three years, compared to an average of 41% globally.
This positivity is also reflected in our assessment of the short and long-term economic outlook for India. We expect India to see growth of over 7% in both 2017 and 2018, higher than China and faster than any other large economy.
Over the long-term, we think GDP growth could average around 5% per annum over the period to 2050, assuming progress can continue to be made on economic, institutional and regulatory reforms. Our World in 2050 report outlines that this could establish India as one of the ‘Big 3’ economies by 2050 together with China and the US. India alone could be larger than the whole of the EU27 by the middle of the century.
These three factors position India as a critical partner for the UK post-Brexit. We see strong growth opportunities in a broad range of sectors from fintech and infrastructure to education and tourism.
Investing in a fast-growing emerging economy will be key to success for UK businesses, who won’t see the same level of growth if they keep all their eggs in the baskets of established economies. India offers a great opportunity for businesses looking for an emerging economy with pre-existing ties to the UK, strong business optimism and healthy economic growth forecasts.
Our India Business Group provides advice and practical assistance to UK clients wishing to explore business opportunities in India, whether they’re looking to expand internationally for the first time, or grow a business they already have.