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The number of Indian companies in the UK is growing. Reuters

New research has revealed a record number of Indian-owned companies in the UK. The results underline the country's close economic partnership ahead of the UK-India Free Trade Agreement as Britain seeks to negotiate its post-Brexit position.

The results were compiled from the Grant Thornton's India Meets Britain Tracker 2023. Grant Thornton is an independent assurance, tax and advisory firm. They compiled India Meets Britain Tracker 2023 using data from 954 UK-incorporated limited companies owned or controlled by Indian parent companies or citizens living outside of the UK.

The tracker has been running annually for 10 years to analyse data from UK-limited companies that are owned or controlled by Indian interests.

This year there were 954 Indian-owned companies in the UK, which is an increase of almost a third from 2014 and up from 900 in 2022.

The results demonstrated the economic contribution made by these companies, with a combined turnover for 2023 was £50.5 billion (up from £19 billion in 2014) and over 100,000 people being employed by them.

According to Chandrajit Banerjee, Director General, Confederation of Indian Industry, the results showed that Indian companies are key participants in the UK economy. "This report is an important initiative that reinforces the contribution of Indian companies to the UK economy, in terms of investment and in providing employment," he said.

Banerjee added: "The rise in participation is a big step forward and we believe that the UK will continue to be a preferred destination for Indian companies seeking opportunities in Europe."

The UK and India have a long-standing relationship. Anuj Chande, Head of South Asia Business Group, Grant Thornton LLP, stated there were a number of factors that made investment in the UK a good option.

"The UK continues to have an attractive offering for Indian investors with a common business language, access to high-quality education and strong brands all contributing to the pull of the UK to Indian business leaders," he said, adding the high levels of Indian diaspora living in the UK is also important.

In recent years the UK's connection to India has grown stronger. Bilateral trade has more than doubled from £16.4 billion in 2013 to £35.9 billion in 2022. Meanwhile, there are also a growing number of UK citizens choosing India as a holiday destination.

Recently, the two governments have sought to strengthen this tie by negotiating the UK-India free trade agreement. On April 28th, the most recent round of negotiations was concluded in the UK

It is hoped that an agreement with India will make trade easier and cheaper for UK exporters, whilst improving choice and value for consumers.

Chande believes that the agreement will cause the number of Indian-owned companies in the UK to expand and that it "will likely be a platform for further growth in the Indian footprint in the UK." He also believes that along with the rapid growth of the Indian economy "we expect to see a further boost to two-way trade and investment."

India is one of the biggest economies in the world. It is forecast to become the third largest economy by 2030, with its middle-class set to double by the same date from 2019 levels.

Britain has sought similar agreements to the one with India following Brexit. However, there are concerns the benefits of any such deals will not outweigh the impact of Brexit on the economy.

Compared to the pre-pandemic level, UK GDP in Q1 2023 was 0.5 per cent lower. This compares with Eurozone GDP being 2.5 per cent higher than its pre-pandemic level.

Foreign direct investment in UK companies from EU nations is considerably higher than from Asia. According to the most recent figures, EU countries invested just under £700 billion, compared to around £150 billion from Asia. The Americas were the top investors.

There are also question marks over how strong the relationship between India and the UK is. Last month there were reports negotiations on the UK-India free trade agreement had been halted after British PM Rishi Sunak failed to condemn an attack in India by a Sikh separatist group.

At the same time, India is also looking to strengthen ties with Russia. Negotiations for a free trade deal between the two counties are ongoing.