Indian businesses see UK as growth market despite challenges

Indian mid-market businesses are attracted to the UK due to its infrastructure, innovation ecosystem, and digital competitiveness.

• EasternEye
• 23 September, 2024

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By: EasternEye

NEW research by Grant Thornton UK LLP reveals that 89 per cent of Indian businesses view the UK as a preferred destination for international expansion. The findings come from the Grant Thornton International Business Report (IBR), which surveys around 3,500 senior executives across 31 economies every quarter.

Indian mid-market businesses are attracted to the UK due to its infrastructure, innovation ecosystem, and digital competitiveness. However, barriers such as high operational costs, regulatory compliance expenses, and immigration policies remain significant challenges for these businesses.

Anuj Chande, head of the South Asia Business Group at Grant Thornton UK LLP, said, “Investments like the recent stake in BT Group show the ongoing interest from Indian investors in UK assets. However, high property rents, legal fees, and complex immigration policies present challenges for companies looking to invest here.”

Chande suggested that streamlining regulatory processes and simplifying compliance could ease these burdens and support Indian businesses entering the UK market.

The research also indicates that UK businesses are looking to India for growth, with 61 per cent considering it a key international market. Of the 301 UK businesses surveyed, 71 per cent do not currently have a presence in India, but 42 per cent of these plan to establish one in the next two years. For those already in India, 95 per cent plan to expand further.

UK businesses cite ease of doing business, regulation, and infrastructure as the main barriers to operating in India.

Chande added, “Businesses in both markets are looking to each other for expansion due to strategic advantages and cultural connections. While challenges exist, support is available from the Department for Business and Trade and firms like ours.”

The anticipated Free Trade Agreement (FTA) between India and the UK may address some of these issues. Nearly 92 per cent of Indian businesses and 72 per cent of UK businesses believe an FTA would encourage them to explore opportunities in the other market. Most Indian businesses surveyed also have a good understanding of the potential implications of an FTA, compared to 72 per cent of UK businesses.

Chande noted, “The FTA offers a chance to enhance collaboration between the two countries, potentially increasing trade and investment through improved market access and eased visa restrictions.”