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Modi is really good in forgien affairs, have to hand him that.
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Why India is increasing its UK investmentsforget business BBC wants to know why India is intolerant
By Peter ShadboltBusiness reporter
- 2 hours ago
- From the sectionBusiness
Media captionThe trade and investment links between India and the UK
When it comes to Indian investment in the UK, among the most high profile is Tata Motors' ownership of carmaker Jaguar Land Rover.
Yet this is just the tip of an iceberg when it comes to UK firms owned by Indian businesses.
The visit to the UK by Indian Prime Minister Narendra Modi, which starts on Thursday, comes at a time when India is emerging as perhaps the strongest player among the so-called Bric nations - Brazil, Russia, India and China.
While the Brazilian, Chinese and Russian economies are all showing signs of slowing, India is booming.
Shielded from China's slowdown thanks to its huge domestic market, India's economy is growing at a rate of 7% per year, putting it neck and neck with the Chinese.
And some of that Indian growth is finding new markets in the UK.
According to a report earlier this year from government department UK Trade & Investment (UKTI), India is now the third-largest source of foreign direct investment into the UK.
In 2014 alone, investment from India into the UK increased by 64%, and is now almost level with France, the UK's second-largest investor after the US.
Image captionNarendra Modi is keen for India to secure more overseas investment
Throughout last year, India invested in 122 projects in the UK, compared with 124 for France and 564 for the US. This meant that Indian investment created 7,730 new UK jobs in 2014, and safeguarded a further 1,620, said UKTI.
Meanwhile, the UK India Business Council, the non-profit body that aims to boost trade and business links between the two countries, estimates that the total value of Indian investment in the UK in the 2013 to 2014 financial year totalled £1.89bn.
Overall there are now more than 800 Indian-owned businesses in the UK, employing more than 110,000 people.
In addition to Tata Motors, Indian IT firms Infosys and Wipro have UK operations. Meanwhile, sister Tata business, Tata Global Beverages, owns best-selling Tetley Tea; and Tata Steel has significant UK operations, despite recently announced job cuts due to falling demand and cheaper steel from China.
'Ease of business'
Alpesh Patel, of London-based private equity business Praefinium Partners, says that while the success of companies such as Tata and Infosys is well known, the quality of Indian small to medium-sized enterprises has improved significantly over the past 10 years, and many are looking to enter EU markets using the UK as their gateway.
He adds that the ease of doing business in the UK, as well as the English language and familiarity with UK institutions, also makes the UK an attractive proposition for Indian investors.
"Ease of business here is often overlooked and taken for granted," says Mr Patel.
Image captionTetley tea is owned by Tata Global Beverages
"We're used to comparing things in absolute terms - we might say it took ages to fill in a tax return for example - but we don't compare it with the same thing in India where it really is a pain."
He adds that one area that particularly appeals to Indian investors is the ease with which they can raise finance in the UK.
"They're often not looking for money from the UK to go into their company in India, but looking for UK money going into their UK operations. We really overlook the size and strength of our angel investor and venture capital community.
"Relative to companies in India, we're seen as an absolute haven in terms of access to capital if you've got a good business."
Joint ventures
Mukesh Rajani, UK India business group leader at accountancy giant PricewaterhouseCoopers, says that besides the EU, the UK's historical connections with the rest of the world, including Africa, are key in attracting Indian investment.
He adds that Indian firms are also keen to tap into British hi-tech expertise.
Image captionTata Motors bought Jaguar and Land Rover from US group Ford in 2008
"Advanced engineering is a big strength for the UK," says Mr Rajani. "High-end engineering, high-end advanced services, high-end pharmaceuticals are very interesting areas for Indian companies.
"Clearly at the high-end what is on offer in Britain is in a different league, and these things would take time for India to develop as it acquires its own talent."
Richard Heald, chief executive at the UK India Business Council, says that most of the investment in the UK is in the IT sectors and driven by Mr Modi's policy of making India the world's hub for IT industries.
He says: "A lot of the growth in indigenous Indian industries has to be sustained through technological development.
"If Modi's policies are to succeed then it needs to have exposure and involvement with a lot of the technological development, incubation, catapult centres, upstream technology companies that we have here.
"The Indians naturally look to us for that in the form of joint ventures, or acquisitions, or just investment."
Mr Heald highlights pharmaceutical firms Piramal and Cipla as two other Indian businesses that have made significant moves into the UK.
Indian businesses in the UK
110,000
people are employed by Indian companies operating in the UK
- 13 Indian companies each employ more than 1,000 people in the UK
- 65,000 people work for Tata Group, which owns 5 of those 13 companies
- 28,000 of those work for Tata Motors, which owns Jaguar Land Rover
'Huge acceleration'
But what about UK investment going into India?
Between 2000 and 2015, the UK invested $22.2bn (£14.5bn) in India, accounting for around 9% of foreign direct investment in the country, according to a report by UK business group the CBI.
This makes the UK the largest foreign investor in India after Singapore and Mauritius.
The CBI study added that in total UK companies are estimated to employ 691,000 people in India. That is 5.5% of the organised private sector workforce.
Mr Heald says: "We estimate that there's been a 300% increase in the number of British companies setting up there in the past 10 years… there's been a huge acceleration.
"And the type of company is changing too - it's more e-commerce, services, IT and education."
Under India's federal system, individual states are now more competitive, and are seeking inbound investment by cutting red tape, and simplifying the country's notoriously arcane state tax systems.
Mr Heald adds: "The term 'competitive federalism' is now being bandied around… these states really have to compete for the investment pound."
Why India is increasing its UK investments - BBC News
Turingsage
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India sends a message – allow talented migrants to come to the UK
Kamal AhmedBusiness editor
Image copyrightGetty Images
Today, Narendra Modi, the Prime Minister of India, arrives in the UK. There will be plenty of photo opportunities and discussions about increasing investment and trading links between India and Britain.
One of the highlights will be a 60,000 strong event at Wembley on Friday night, which will be a celebration of the contribution the Indian diaspora has made to the British economy.
Mr Modi will speak at the event, largely in Hindi. He will be welcomed by the Prime Minister, David Cameron.
Ahead of the visit, I spoke to the Indian High Commissioner, Ranjan Mathai, who has been busy organising the trip.
He kicked off by welcoming the investment relationship between Britain and India.
Britain certainly puts a lot of money into India - and vice versa.
But the two countries have relatively low levels of trade - the buying of goods and services which is often more closely related to job creation.
"I think both Britain and India could do more to expand the trading opportunities," Mr Mathai told me.
"If you look at the level of trade, and the level of investment, you see a major contrast.
"We are today the third largest investor in the UK, and the UK is the largest G20 investor in India, so investments have done well.
"When you talk of trade, we are still stuck at the level of around $18bn (£11.8bn), which is less than 2% for both of us of our global trade.
"So obviously there is much more that can be done."
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Media captionIndia's High Commissioner, Ranjan Mathai, talks to the BBC's Kamal Ahmed
'Easier travel'
That issue - with India the world's fastest growing major economy with a population of 1.2bn people - will be at the heart of this trip.
One thing that could be done to increase trade, Mr Mathai suggests, would be allowing "easier" travel between the two countries.
There has long been criticism from India that Britain's immigration rules limiting the number of skilled migrants entering the country to work for specific businesses (using what are called Tier 2 visas) are hampering the expansion of trading links.
In an interview at the World Economic Forum at Davos in 2013, Natarajan Chandrasekaran, the chief executive of the Indian technology firm, Tata Consultancy Services, said expansion plans in the UK were being constrained.
Mr Mathai appears to agree.
"I think in any two countries anywhere in the world, the ease of travelling between business partners is very significant," he said.
"There are a large number of Indian investors here.
"According to some figures I have seen, there are 700 Indian companies invested in the UK, which provide around 100,000 jobs in this country.
"So I believe that if Indian companies face restrictions on their ability to have skilled people come, it could have an effect on the way they do business."
Mr Mathai said that Indian companies had raised the issue with the authorities in the UK.
And he hoped that the British government was listening, saying the issue of economic mobility was not the same as the far more toxic issue of immigration - at least as far as Indian businesses are concerned.
Indian businesses in the UK
110,000
people are employed by Indian companies operating in the UK
'Myth-busting'
"Mobility for business is a completely separate issue and should not be linked to migration, is the view of all the Indian companies," Mr Mathai said.
"Some of them have been very specific - particularly in the high technology sector and the information technology sector, which have driven a lot of the growth in our training and investment relationship - that sometimes they are not able to get the kind of skilled people they want, which is why they have to bring in people for short term assignments, and I think that must be taken full note of by the British government."
The number of Indian students studying in the UK has also been declining, after the government restricted the use of post-work study visas.
Both issues are likely to be high on the agenda when Mr Cameron hosts Mr Modi at Chequers during his three day visit.
The British prime minister has been clear that he believes the UK is very much open for business when it comes to India.
On his last official visit to the country in 2013 he told The Times of India that it was "simply not true" that Britain was "freezing out" Indians.
"We want to attract tourists, students, and businessmen," he said.
"I think our challenge is getting that message through and countering the myth that somehow we've closed our borders to Indians. That's simply not the case."
He will certainly have a chance for a bit "myth-busting" - as he sees it - in his discussions with Mr Modi.
India sends a message – allow talented migrants to come to the UK - BBC News
BBC live reporting on visit
LIVE Indian Prime Minister Narendra Modi in UK - BBC News
Kamal AhmedBusiness editor
- 12 November 2015
- From the sectionBusiness
- 304comments
Today, Narendra Modi, the Prime Minister of India, arrives in the UK. There will be plenty of photo opportunities and discussions about increasing investment and trading links between India and Britain.
One of the highlights will be a 60,000 strong event at Wembley on Friday night, which will be a celebration of the contribution the Indian diaspora has made to the British economy.
Mr Modi will speak at the event, largely in Hindi. He will be welcomed by the Prime Minister, David Cameron.
Ahead of the visit, I spoke to the Indian High Commissioner, Ranjan Mathai, who has been busy organising the trip.
He kicked off by welcoming the investment relationship between Britain and India.
Britain certainly puts a lot of money into India - and vice versa.
But the two countries have relatively low levels of trade - the buying of goods and services which is often more closely related to job creation.
"I think both Britain and India could do more to expand the trading opportunities," Mr Mathai told me.
"If you look at the level of trade, and the level of investment, you see a major contrast.
"We are today the third largest investor in the UK, and the UK is the largest G20 investor in India, so investments have done well.
"When you talk of trade, we are still stuck at the level of around $18bn (£11.8bn), which is less than 2% for both of us of our global trade.
"So obviously there is much more that can be done."
Jump media player
Media player help
Out of media player. Press enter to return or tab to continue.
Media captionIndia's High Commissioner, Ranjan Mathai, talks to the BBC's Kamal Ahmed
'Easier travel'
That issue - with India the world's fastest growing major economy with a population of 1.2bn people - will be at the heart of this trip.
One thing that could be done to increase trade, Mr Mathai suggests, would be allowing "easier" travel between the two countries.
There has long been criticism from India that Britain's immigration rules limiting the number of skilled migrants entering the country to work for specific businesses (using what are called Tier 2 visas) are hampering the expansion of trading links.
In an interview at the World Economic Forum at Davos in 2013, Natarajan Chandrasekaran, the chief executive of the Indian technology firm, Tata Consultancy Services, said expansion plans in the UK were being constrained.
Mr Mathai appears to agree.
"I think in any two countries anywhere in the world, the ease of travelling between business partners is very significant," he said.
"There are a large number of Indian investors here.
"According to some figures I have seen, there are 700 Indian companies invested in the UK, which provide around 100,000 jobs in this country.
"So I believe that if Indian companies face restrictions on their ability to have skilled people come, it could have an effect on the way they do business."
Mr Mathai said that Indian companies had raised the issue with the authorities in the UK.
And he hoped that the British government was listening, saying the issue of economic mobility was not the same as the far more toxic issue of immigration - at least as far as Indian businesses are concerned.
Indian businesses in the UK
110,000
people are employed by Indian companies operating in the UK
- 13 Indian companies each employ more than 1,000 people in the UK
- 65,000 people work for Tata Group, which owns 5 of those 13 companies
- 28,000 of those work for Tata Motors, which owns Jaguar Land Rover
'Myth-busting'
"Mobility for business is a completely separate issue and should not be linked to migration, is the view of all the Indian companies," Mr Mathai said.
"Some of them have been very specific - particularly in the high technology sector and the information technology sector, which have driven a lot of the growth in our training and investment relationship - that sometimes they are not able to get the kind of skilled people they want, which is why they have to bring in people for short term assignments, and I think that must be taken full note of by the British government."
The number of Indian students studying in the UK has also been declining, after the government restricted the use of post-work study visas.
Both issues are likely to be high on the agenda when Mr Cameron hosts Mr Modi at Chequers during his three day visit.
The British prime minister has been clear that he believes the UK is very much open for business when it comes to India.
On his last official visit to the country in 2013 he told The Times of India that it was "simply not true" that Britain was "freezing out" Indians.
"We want to attract tourists, students, and businessmen," he said.
"I think our challenge is getting that message through and countering the myth that somehow we've closed our borders to Indians. That's simply not the case."
He will certainly have a chance for a bit "myth-busting" - as he sees it - in his discussions with Mr Modi.
India sends a message – allow talented migrants to come to the UK - BBC News
BBC live reporting on visit
LIVE Indian Prime Minister Narendra Modi in UK - BBC News
mike2000 is back
ELITE MEMBER
- Joined
- Apr 12, 2015
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Why India is increasing its UK investments
By Peter ShadboltBusiness reporter
Jump media player
- 2 hours ago
- From the sectionBusiness
Media captionThe trade and investment links between India and the UK
When it comes to Indian investment in the UK, among the most high profile is Tata Motors' ownership of carmaker Jaguar Land Rover.
Yet this is just the tip of an iceberg when it comes to UK firms owned by Indian businesses.
The visit to the UK by Indian Prime Minister Narendra Modi, which starts on Thursday, comes at a time when India is emerging as perhaps the strongest player among the so-called Bric nations - Brazil, Russia, India and China.
While the Brazilian, Chinese and Russian economies are all showing signs of slowing, India is booming.
Shielded from China's slowdown thanks to its huge domestic market, India's economy is growing at a rate of 7% per year, putting it neck and neck with the Chinese.
And some of that Indian growth is finding new markets in the UK.
According to a report earlier this year from government department UK Trade & Investment (UKTI), India is now the third-largest source of foreign direct investment into the UK.
In 2014 alone, investment from India into the UK increased by 64%, and is now almost level with France, the UK's second-largest investor after the US.
Image copyrightGetty Images
Image captionNarendra Modi is keen for India to secure more overseas investment
Throughout last year, India invested in 122 projects in the UK, compared with 124 for France and 564 for the US. This meant that Indian investment created 7,730 new UK jobs in 2014, and safeguarded a further 1,620, said UKTI.
Meanwhile, the UK India Business Council, the non-profit body that aims to boost trade and business links between the two countries, estimates that the total value of Indian investment in the UK in the 2013 to 2014 financial year totalled £1.89bn.
Overall there are now more than 800 Indian-owned businesses in the UK, employing more than 110,000 people.
In addition to Tata Motors, Indian IT firms Infosys and Wipro have UK operations. Meanwhile, sister Tata business, Tata Global Beverages, owns best-selling Tetley Tea; and Tata Steel has significant UK operations, despite recently announced job cuts due to falling demand and cheaper steel from China.
'Ease of business'
Alpesh Patel, of London-based private equity business Praefinium Partners, says that while the success of companies such as Tata and Infosys is well known, the quality of Indian small to medium-sized enterprises has improved significantly over the past 10 years, and many are looking to enter EU markets using the UK as their gateway.
He adds that the ease of doing business in the UK, as well as the English language and familiarity with UK institutions, also makes the UK an attractive proposition for Indian investors.
"Ease of business here is often overlooked and taken for granted," says Mr Patel.
Image captionTetley tea is owned by Tata Global Beverages
"We're used to comparing things in absolute terms - we might say it took ages to fill in a tax return for example - but we don't compare it with the same thing in India where it really is a pain."
He adds that one area that particularly appeals to Indian investors is the ease with which they can raise finance in the UK.
"They're often not looking for money from the UK to go into their company in India, but looking for UK money going into their UK operations. We really overlook the size and strength of our angel investor and venture capital community.
"Relative to companies in India, we're seen as an absolute haven in terms of access to capital if you've got a good business."
Joint ventures
Mukesh Rajani, UK India business group leader at accountancy giant PricewaterhouseCoopers, says that besides the EU, the UK's historical connections with the rest of the world, including Africa, are key in attracting Indian investment.
He adds that Indian firms are also keen to tap into British hi-tech expertise.
Image copyrightChristopher Furlong
Image captionTata Motors bought Jaguar and Land Rover from US group Ford in 2008
"Advanced engineering is a big strength for the UK," says Mr Rajani. "High-end engineering, high-end advanced services, high-end pharmaceuticals are very interesting areas for Indian companies.
"Clearly at the high-end what is on offer in Britain is in a different league, and these things would take time for India to develop as it acquires its own talent."
Richard Heald, chief executive at the UK India Business Council, says that most of the investment in the UK is in the IT sectors and driven by Mr Modi's policy of making India the world's hub for IT industries.
He says: "A lot of the growth in indigenous Indian industries has to be sustained through technological development.
"If Modi's policies are to succeed then it needs to have exposure and involvement with a lot of the technological development, incubation, catapult centres, upstream technology companies that we have here.
"The Indians naturally look to us for that in the form of joint ventures, or acquisitions, or just investment."
Mr Heald highlights pharmaceutical firms Piramal and Cipla as two other Indian businesses that have made significant moves into the UK.
Indian businesses in the UK
110,000
people are employed by Indian companies operating in the UK
Source: Grant Thornton India Tracker 2015
- 13 Indian companies each employ more than 1,000 people in the UK
- 65,000 people work for Tata Group, which owns 5 of those 13 companies
- 28,000 of those work for Tata Motors, which owns Jaguar Land Rover
'Huge acceleration'
But what about UK investment going into India?
Between 2000 and 2015, the UK invested $22.2bn (£14.5bn) in India, accounting for around 9% of foreign direct investment in the country, according to a report by UK business group the CBI.
This makes the UK the largest foreign investor in India after Singapore and Mauritius.
The CBI study added that in total UK companies are estimated to employ 691,000 people in India. That is 5.5% of the organised private sector workforce.
Mr Heald says: "We estimate that there's been a 300% increase in the number of British companies setting up there in the past 10 years… there's been a huge acceleration.
"And the type of company is changing too - it's more e-commerce, services, IT and education."
Under India's federal system, individual states are now more competitive, and are seeking inbound investment by cutting red tape, and simplifying the country's notoriously arcane state tax systems.
Mr Heald adds: "The term 'competitive federalism' is now being bandied around… these states really have to compete for the investment pound."
Why India is increasing its UK investments - BBC News
India is Britains third largest Foreign direct investor(@j20blackdragon , using your outdated logic guess this means we are more subservient to India than to China isnt it?
) , While Britain is Indias largest investor. When it comes to business and WIN-WIN cooperations we are pragmatic and open country(the most in Europe and even the West).we dont care which country money/capital comes from be it U.S,JAPAN,CHIBA,INDIA, BRAZIL, VENEZUELA, OR EVEN RUSSIA(though we have differences/conflict of intetests with the later). We live in a globalised world afterall. So i welcome Modi's visit to Great Britain. Hoefully many deals will be sigmed
Turingsage
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India is Britains third largest Foreign direct investor(@j20blackdragon , using your outdated logic guess this means we are more subservient to India than to China isnt it?
When it comes to business and WIN-WIN cooperations we are pragmatic and open country(the most in Europe and even the West).we dont care which country money/capital comes from be it U.S,JAPAN,CHIBA,INDIA, BRAZIL, VENEZUELA, OR EVEN RUSSIA(though we have differences/conflict of intetests with the later). We live in a globalised world afterall. So i welcome Modi's visit to Great Britain. Hoefully many deals will be sigmed
Absolutely right. However India is only temporarily the 3rd largest investor in the UK, it should overhaul France within a year or two. The figures between the 2 are fairly small. It is Germany and France that India looks to for strategic convergence and UK is lower down the list.
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