Press Release
Indian businesses eye the UK for global expansion
23 Sep 2024
New research from leading business and financial adviser Grant Thornton UK LLP finds that the UK is a preferred international destination for 89% of Indian businesses.
This is according to data from the Grant Thornton International Business Report (IBR)*, which surveys the expectations of around 3,500 senior executives in 31 economies, every quarter.
The research finds that Indian mid-market businesses view the UK as a key growth market due to its ‘strong infrastructure’, ‘strong innovation ecosystem’ and ‘digital competitiveness’.
But while Indian businesses recognise the opportunities for growth in the UK market, significant barriers remain that need to be addressed. The biggest barriers identified are the ‘high cost of doing business’ in the UK, ‘high cost of regulatory compliance’ and ‘immigration policies and visas’.
Anuj Chande OBE, Head of South Asia Business Group, Grant Thornton UK LLP, said:
“Significant investments, such as the recent stake made in BT Group, demonstrate the continued interest from Indian investors in the UK, and UK assets. But the high cost of doing business here, due to high property rents and operational overheads, plus the costs that come from the reporting and compliance requirements of the UK’s regulatory system, including high legal fees and audit expenses, can be a significant challenge for any international company to address. Combined with the complexity of the UK’s immigration and visa policies, which require detailed business documentation and proof of economic contribution, it’s evident that there are challenges for any business looking to invest here.
“Streamlining regulatory processes and simplifying compliance, could help to alleviate operational burdens for Indian businesses looking to the UK. This would help facilitate their entry into the UK market and promote a more conducive environment for business growth.”
UK businesses also looking to India for growth
The research also shows that UK businesses see opportunities in India, with 61% noting it as a focus international growth market.
Of the 301 UK businesses surveyed, around three quarters (71%) do not currently have a presence established in India but, of these, 42% have plans to establish a presence in the next two years. Of those who already have a presence (29%), almost all (95%) plan to expand this further.
The biggest barriers for UK businesses looking to India are the ‘ease of doing business’, ‘regulation and foreign exchange control’ and the country’s ‘infrastructure’.
Anuj Chande OBE added:
“Businesses in both the India and UK markets are setting their sights on the other as a key destination for global expansion, drawn by the two markets’ strategic advantages and strong cultural connections.
“While our research has also identified the biggest challenges many UK businesses face when setting up in India there is support available. The Department for Business and Trade provides support to those seeking to trade or invest in India and the UK, while firms, such as ours, can also provide tailored support for businesses exploring new markets."
Free Trade Agreement likely to boost activity across the UK-India corridor
The anticipated conclusion of a Free Trade Agreement (FTA) between India and the UK may be an opportunity to address some of these issues. Almost all (92%) of the Indian businesses surveyed said an FTA with the UK would encourage them to explore opportunities in this market, with 72% of UK businesses saying the same.
The majority (90%) of the Indian businesses surveyed also have a good understanding of the potential provisions and implications for business from an FTA, compared to 72% of UK businesses.
Anuj Chande OBE said:
"The Free Trade Agreement between India and the UK offers an opportunity to amplify the possibilities recognised by businesses on both sides of the UK-India corridor, positively impacting economic collaboration between the two countries. For example, greater market access and easing of visa restrictions would pave the way for further growth in trade and investment in both countries.”
*The Grant Thornton International Business Report (IBR) is a quarterly survey of mid-market businesses. Launched in 1992, the IBR provides insights into the views and expectations of around 3,500 senior executives in mid-market companies, in 31 economies. Questionnaires are translated into local languages and fieldwork is undertaken through both online and telephone interviews. The data in this release is based on interviews conducted between April-June 2024, with 301 mid-sized businesses in the UK (defined as revenue between £15million - £1billion) and 166 mid-sized businesses in India (defined as revenue between USD50million – USD2billion)
