Friday, July 14, 2006

India 3rd Largest Investor in the UK

Indian investments in UK to continue
India Infoline News Service / Mumbai Jul 06, 2006 13:32

India focused corporate advisory firm IndusView, says, the enormous growth in Indian investment in the UK, announced by UK Trade and Investment, will continue to grow in the years ahead.

The enormous growth in Indian investment in the UK, announced by UK Trade and Investment, will continue to grow in the years ahead. UK companies, however, are increasingly missing out on investment and growth opportunities in India, says India focused corporate advisory firm IndusView.

India is the third largest investor in U.K. according to the ‘U.K. Inward Investment 2005-06’ report by UK Trade & Investment (UKTI). The report shows the number of UK projects financed by Indian companies doubled to 76, with Indian investment up 111%, creating 1,449 new jobs. As a clear sign of trend-reversal, the amount of money invested in the U.K. by Indian companies had topped the investment made by British companies in India for the last financial year.

India had already overtaken China, and was running neck and neck with Japan, based on the performance of the first three quarters of the fiscal year, The league tables are calculated on the basis of total direct investment and number of jobs created as a result.

More than 430 Indian companies are already based in London. The number of Indian companies that started U.K. operations grew by 23% last year.

"India has historic ties to Britain. Both countries have similar legal, accounting, finance and judicial systems,” said IndusView’s Chairman Bundeep Singh Rangar. “The English language and Parliamentary democracy are as Indian as they are English. It should surprise no one that Indian companies now invest so heavily in the UK. There is a truly dynamic and exciting relationship between Indian and UK business.”

IT remains the dominant sector for Indian investment. India now has two companies in the UK top 40 IT companies and is expected to have at least one in the top 25 within the next five years. In the last year there was also strong growth in pharmaceuticals and engineering. Looking forward, IndusView predicts cross-border deals in telecoms, software, animation, media, automotive, engineering and professional services firms to increase in the next fiscal year.

The U.K. is not only the U.K. where India Investors are putting their money. Netherlands is another destination for Indian overseas investors. About $244 million of Indian investments were approved for the Netherlands during the first nine months of the financial year 2005-06.

“Britain needs to keep its competitive edge vis-à-vis other European countries when it comes to its business relationship with India. European companies are moving aggressively to capitalise on India’s economic growth. The U.K. government cannot afford to sit idly by if it wants Britain to remain a global economic force,” said Rangar.

At present a number of key Indian companies are growing overseas and focusing on the UK. India is no longer simply a destination for labour solutions and outsourcing. The shift is toward outward expansion is a sign of increased economic confidence of the world’s second-fastest growing economy.

With the Indian economic juggernaut gathering greater momentum, now is the time for Britain’s companies to participate and grow. Today’s announcement is indicative of a changing global economic reality.

“Our clients are from across sectors including retail, financial services, software, telecoms services all want to be in India yesterday. But gaining access has been a historical problem for British business. The U.K. government and U.K.’s companies need to be more focused on how to address that market, because the wealth of opportunities that are present today are not going to be there much longer.”

The UK Government could be more focused on addressing the Indian market, creating a unified point of entry for British businesses.

Bundeep Singh Rangar