High Commission of India, London
Indo-British Economic & Commercial Relations

UK INVESTMENT IN INDIA

UK ranks third in terms of investment approvals after Mauritius and the USA but in terms of actual inflows it ranks fifth after Mauritius, USA, Japan and Germany. Year-wise break-up of investment proposals from the UK approved during 1991-1999 is as follows:

Investment Proposals Approved (1991-1999)

(Amounts in Rs. Millions)

Country-wise break-up of Foreign Direct Investment approved during 1991-1999: These details are available at the Ministry of Industry website - http://www.nic.in/indmin.

Salient features of the UK investment in India from 1991 to 1999 are:

• total UK approvals of Rupees 159.7 billion accounts for 7.62% of the total approvals;
• inflows from the UK at Rupees 22.28 billion (or US$ 656.9 million) from 1991 to 1999 accounted for 3.2% of the total inflows;
• while the UK investment is spread over the entire spectrum of Indian economy, it is largely focused in the core sectors of gas, oil, power, telecom, chemicals, sugar, financial services and metallurgical industries.
• the broad break-up of investment in top sectors is 55% in fuels (power and oil refinery), 7.5% in telecommunications, 5.5% in sugar, 5.5% in chemicals (other than fertilisers) and 4.5% in metallurgical industries.
• thrust of the UK investment is to focus co-operation among small and medium enterprises; more than 800 joint ventures have been approved since 1991.

Cumulative British investment in India, estimated at around £ 3 billion, makes it the largest investor in India. Besides long standing British companies in India such as ICI, Glaxo, GEC, Rolls Royce, British Aerospace, SmithKline Beecham, British Petroleum, British Airways , British American Tobacco, and Cadbury, the new major players include British Gas, National Power, National Grid, British Telecom, Shell International Petroleum Co., United Distillers, Trafalgar House, and other British Construction companies. All British oil majors are present in the Indian oil sector. Opening of the roads and ports sector in India has opened immense opportunities for construction and maritime equipment manufacturers.

A large number of British insurance companies, including Prudential, Commercial Union, Royal Sun Alliance, Eagle Star, and General Accident, have already signed MoUs with various Indian companies and are keen to enter the Indian market.

Foreign Institutional investors and fund managers based in UK such as Jardine Flemings, HSBC, ANZ, Barclays, James Capel, Chescor, and Touche Ross have played a major role in facilitating portfolio investments and directing FDI into India. Some of the major issues launched by the Indian companies with the help of British banks include ESSAR. ITC, Hindalco, Shipping Corporation of India, VSNL, CONCOR, MTNL,GAIL etc. A number of operators have been registered as FIIs with SEBI and are actively involved in disinvestment of government holdings in various PSUs.

Indian presence in the UK

India too has a strong presence in the UK. Over 110 Indian companies have resident presence in the UK. Almost all the major Indian software companies including, Infosys, HCL, Pentafour, Hexaware, TCS, Sonata and major indian corporates like ITC, Tatas, Godrej, Reliance, L&T, Mahindras, Bajaj, STC, major public sector banks and apex business associations like CII and FICCI have presence in UK and significantly contribute towards strengthening economic ties.

The contribution of the over 1.5 million strong non-resident Indian population - well known industrialists, academics, professionals in medicine, accountancy, law, management and financial services has been widely acknowledged. Many of them have been honoured by the British government, and are also the mainstay of the retail trade and catering services in the UK.

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