India and the UK strengthen ties in the wake of Brexit

India is strongly positioned to capitalise on the UK’s post-Brexit economy, currently operating with well over 800 companies in the country and contributing more than £460 million in corporation tax.

Every year, Grant Thornton conducts an annual roundup of the commercial activity of Indian companies in the United Kingdom. The firm reports that there are 842 Indian companies operational in the UK, which is exactly the same figure as last year. These companies cumulatively generated a turnover of more than £41 billion, and contributed more than £460 million to the corporation tax pool.

The turnover is significantly smaller than last year’s $48 billion, although the researchers attribute this to a late filing that left approximately £6 billion out of the calculations. Meanwhile the number of employees at Indian companies in the UK increased by more than 6,000, reaching a total of 110,000.

For a more nuanced overview, Grant Thornton zoomed in on 72 Indian companies that generated revenue growth of more than 10% over the last year. The firm found that tech companies dominate the Indian presence in the UK by a considerable distance, followed by pharmaceuticals, engineering & manufacturing and business services, which all have a roughly equal market share.

Other sectors in the fray include automotive, energy, financial services, media and hospitality, although these sectors all had a contribution well short of 10%. The fastest growing Indian company in the UK, meanwhile, is government-backed EESL Energypro Assets, which aims to invest £100 million in the UK’s low-carbon, energy-efficient and renewable energy landscape over the next three years.

Overall, the 72 companies assessed by Grant Thornton generated a cumulative turnover of just under £4 billion, while average revenue growth stood at an impressive 40% for last year.The firm puts the revenue growth in the context of increased priority being given to Indian businesses by the UK government, as it looks to form contingency plans in the case of a no-deal Brexit.

With its vibrant trade environment and large consumer market, India is an appealing trade prospect for the UK – one that the government has looked to nurture over the last year. As a result, the position of Indian companies is only expected to strengthen. From the other end, cementing global trade relations is a key part of India’s economic recovery plan from the Covid-19 crisis, which signals targeted efforts from India as well.

Trade between the two countries is on the up. Grant Thornton reported that UK imports from India grew from less than £13 billion in 2018 to more than £16 billion by 2019. While these figures fluctuate, the firm suggests that the two countries are working towards a trade deal, which might take some years to materialise.

“India and the UK have been working on ways to improve trade for the last two years and have agreed to put in place building blocks that will eventually aggregate into a trade agreement. New bilateral working groups in food and drink, healthcare and data services indicate where the two countries see most potential,” said the report authors Anuj Chande, partner and Head of South Asia Group at Grant Thornton and Chandru Iyer – Head of Business Development at the South Asia Group.