Prime Minister Narendra Modi with British PM Theresa May At New Delhi's Hyderabad House. (File)
The UK remains the largest job creator in India via foreign direct investment, seeing off tough competition from Japan, creating one in 10 jobs between April 2000 and September 2016, says a report. However, British investors are eyeing further progress to secure investor protection under the model Bilateral Investment Treaty, greater momentum in reducing corporate tax rates and further improvements in the ease of doing business, according to the Confederation of British Industry's second Sterling Assets India report, supported by PricewaterhouseCoopers and the UK India Business Council.
The Confederation of British Industry (CBI) is a UK-based business organisation.
"Between 2000 and 2016, British FDI created 371,000 jobs - 10 per cent of all jobs created by FDI. The total number of people employed by British companies in India currently stands at 788,000 - representing 5.3 per cent, or one in twenty, of private sector jobs," according to the report.
Moreover, the UK is the single largest G20 investor in India, and supports close to 800,000 jobs.
Between 2000 and 2016, the UK invested $24.07 billion in India - increasing its investment by $1.87 billion between 2015 and 2016 - representing 8 per cent of all FDI into the country.
The UK remains the largest of all foreign investors into India after Mauritius and Singapore. In 2016, Japan emerged as a tough competitor for the UK.
Japanese firms invested $5.46 billion between April 2015 and September 2016. This has brought the Japanese FDI into India during the 16-year period to $23.76 billion, just marginally short of the UK FDI figure.
"As new opportunities spring up in India - from its rapid digitisation to more young people wanting to study at the UK's world leading universities - our firms will be looking to take full advantage. Further reductions in India's corporate tax rates and improvements to the ease of doing business will see the relationship between India and the UK go from strength to strength," Carolyn Fairbairn, CBI Director-General, said.
The chemicals sector receives the lion's share of British investment in India at $6.1 billion (25 per cent of UK FDI), followed by drugs and pharmaceuticals at $4.1 billion (17 per cent) and food processing at $3.2 billion (14 per cent).
The main reasons why UK companies are attracted to India are a growing market, easy talent availability, a stable political system, new business-friendly policies by state and central governments, use of English as the language of business, saturation of western markets and similar legal and educational systems, according to the report.
"India remains something of an investment magnet to British companies. As Asia's third largest economy, India has attracted FDI from the UK into both industry and services sectors between 2000 and 2016," it pointed out.
In 18 months between April 2015 and September 2016, India received FDI from the UK to the tune of $1.87 billion while FDI from Mauritius and Singapore was $5.85 billion and $4.68 billion respectively. Roughly 38,000 jobs were created by UK FDI in the period.
Significantly, between April 2015 and September 2016, nearly a quarter (22.35 per cent) of British investments went to Delhi-National Capital Region. The state of Maharashtra, with Mumbai, attracted the largest share of British investment ($7.47 billion) between 2000 and 2016.