UK creates maximum jobs in India via FDI: Report

23 February 2017

The UK remains the largest job creator in India through foreign direct investment, accounting for every one out of 10 jobs created through FDI, with Japan closing in fast, creating one in ten jobs between April 2000 and September 2016, says a report.

"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.

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 UK-based business organisation CBI's second Sterling Assets India report, supported by PwC and the UK India Business Council.

The UK is also the single largest G20 investor in India. Between 2000 and 2016, the UK invested $24.07 billion in India increasing its investment by $1.87 billion between 2015 and 2016, which represents 8 per cent of all foreign direct investment (FDI) into the country.

The UK remains the largest inbound foreign investor in India after Mauritius and Singapore.

In 2016, Japan emerged as a major competitor as Japanese firms invested $5.46 billion between April 2015 and September 2016, taking Japanese FDI in 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).

UK companies, according to the report, are attracted by 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, similar legal and education system and the saturation of western markets.

"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. Maharashtra, with Mumbai as capital, attracted the largest share of British investment ($7.47 billion) between 2000 and 2016.

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