India - U.K Economic Relations

Introduction

  • India and the United Kingdom share close and friendly ties. The bilateral relationship that was upgraded to a strategic partnership in 2004 was further strengthened with the visit of British Prime Minister Cameron to India in 2010 during which the foundation for enhanced partnership for the Future was laid.
  • India already invests more in the UK than in the rest of the EU combined, and the UK is the largest G20 investor in India. Both the nations are committed to further strengthen the economic relationship, including through deepening the bilateral trade and investment.
  • Government of India announced its intention to issue the first Government-backed Rupee Bond in London and several private sector entities including HDFC, Bharti Airtel, State Bank of India and Yes Bank announced their plans to raise finance through the City of London. It was agreed that the City of London could play an important role in channelling investments into Indian infrastructure projects, leveraging its capital and expertise.
  • It was decided to establish a fast-track mechanism to facilitate UK’s investments into India and to set up an India-UK Partnership fund under the National Infrastructure Investment Fund (NIIF) to facilitate global investments through the City of London for Indian infrastructure projects.
  • Bilateral mechanisms like India-UK Economic & Financial Dialogue (EFD) and India-UK Joint Economic and Trade Committee (JETCO) form the basis of institutional engagements between the two countries.
India - U.K FDI Synopsis
  • Share of U.K in FDI Equity Inflows in India(as on March 2017)
  • Rank:U.K ranks 4th
  • Percentage share of total FDI inflows:7%
  • Cumulative FDI Inflows from U.K:US$ 24.59 billions
  • Sectors that attracted maximum FDI Equity inflows from United Kingdom (from January, 2000 to December, 2015)
Rank Sector Amount of FDI equity inflows( in US$ millions)
1. Chemicals (Other Than Fertilizers (25%) 5,791.73
2. Drugs & Pharmaceuticals (17%) 3,933.40
3. Food Processing Industries (13%) 3,054.81
4. Services Sector (13%) 2,979.73
5. Petroleum & Natural Gas (10%) 2,318.46
GRAND TOTAL 18,078.13

Note: *Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis

Top FDI inflows received from United Kingdom through Indian companies

(from January 2000 to December 2015):

Sl. No Name of Indian Company Name of Foreign Collaborator Item of Manufacture Amount of FDI Inflows (In US$ millions)
1. HINDUSTAN UNILEVER LDT (HUL) UNILEVER PLC CONSUMER GOODS BUSINESS 3,007.56
2. RELIANCE INDUSTRIES LTD BP EXPLORATION (ALPHA) LIMITED MANUFACTURE OF OTHER PLASTICS IN PRIMARY FORMS N.E.C. 3,261.51
3. ABBOTT HEALTHCARE PVT LTD ABBOTT ASIA HOLDINGS LTD MANUFACTURE OF ALLOPATHIC PHARMACEUTICAL PREPARATIONS 2,397.02
4. RELIANCE INDUSTRIES LTD BP EXPLORATION (ALPHA) LIMITED REFINING OF PETROLEUM 1,827.93
5. RELIANCE INDUSTRIES LTD EXPLORATION (ALPHA) LIMITED MANUFACTURE OF BAISC ORGANIC CHEMICALS N.E.C. 1,956.12
6. CAIRN (I) LTD CAIRAN UK HOLDING BUSINESS SERVICES NOT ELSEWHERE CLASSIFIED 1,492.82
7. ABBOTT HEALTHCARE PVT LTD ABBOT ASIA HOLDINGS LTD MANUFACTURE OF ALLOPATHIC PHARMACEUTICAL PREPARATIONS 447.48
8. RELIANCE PORTS AND TERMINAL LTD HSBC BANK PLC OPERATING PORT FACILITES. 385.07
9. SIGNODE INDIA LIMITED STRAPEX HOLDINGS LTD MANUFACTURE OF OTHER PLASTIC PRODUCTS NEC 206.47
10. RELIANCE HOLIDAYS AND RESORTS INDIA LTD HSBC BANK PLC OPERATING PORT FACILITIES. 238.23
11. CASTROL INDIA LTD CASTROL LTD 192.13
12. MUNDRA PORT AND SEZ LTD VARIOUS NIRS/ FIIS SERVICES NEC 178.84
13. HIMACHAL FUTURISTIC COMMUNATIONS LTD ECOM COM COMMUNICATION LTD 168.83
14. IDEA CELLULAR LTD MERRILL LYNCH INTERNATIONAL TELEPHONE COMMUNICATION 146.69
15. EMAAR MGF LAND PVT. LTD CITI BANK INTERNATIONAL PLC DEVELOPING AND SUBDIVIDING REAL ESTATE INTO LOTS 122.63
16. TRENT HYPERMARKET PVT LTD TESCO OVERSEAS INVESTMENTS LIMITED SPECIALISED RETAIL TRADE IN CEREALS AND PULSES, TEA, COFFEE, SPICES, FLOUR AND OTHER BASIC FOOD ITEM 115.01
17. BOC INDIA LIMITED THE BIC GROUP PLC GENERATION OF GAS IN GAS-WORKS AND DISTRIBUTION THROUGH MAINS TO HOUSEHOLDS, INDUSTRIAL, COMMERCIAL 107.51
18. BOC (I) LTD. THE BOC GROUP PLC MANUFACTURE OF INDUSTRIA GASES 139.49
19. STANDARD CHARTERED INVESTMENT & LOANS LD STANDARD CHARTERED BANK OTHER FINANCIAL SERVICES N.E.C 102.90
20. HINDUSTAN OIL EXPLORATION COM. LTD. ENI UK HOLDINGS PLC EXPLORATION ON DEVELOPMENT & PRODUCTION OF OIL AND NATURAL GAS 82.65
21. J. P. MORGAN SECURITIES PVT. LTD. J. P. MORGAN INTERNATIONAL FINANCE LTD. INVESTMENT RESEARCH AND COUNSELLING ACTIVITIES. 76.91
22. CAPARO INDIA PVT. LTD CAPARO INDIA LTD. MANUFACTURE OF PARTS & ACCESSORIES N.E.C. FOR MACHINERY & EQUIPMENT USED BY CONSTRUCTION & MINING INDUSTRIES 70.02
23. SOLVAY PHARMA INDIA LTD ABBOTT CAPITAL INDIA LTD DEAL IN PHARMACEUTICAL SECTOR 65.87
GRAND TOTAL 17,619.31
Top Indian companies investing in U.K

According to a report from government department UK Trade & Investment (UKTI) in the year 2015, India is the third-largest source of foreign direct investment into the UK.

  • Bharti Airtel
  • HCL Technologies
  • Emcure Pharma
  • Apollo Tyres
  • Wockhardt
  • Tata Motors
  • Infosys
  • Wipro

Tata business, Tata Global Beverages,Tata Steel