Why UK businesses are fast-tracking expansion plans in India
What's the story
A recent report by Grant Thornton has revealed that a majority of British firms view the India-UK Free Trade Agreement (FTA) as a "game-changer." The deal is fast-tracking expansion plans and encouraging many companies to enter the Indian market. The study found that 72% of UK firms now consider India an important market for international growth, up from 61% last year.
Market entry
Major shift in sentiment
The report further revealed that while only 28% of the surveyed businesses currently operate in India, a whopping 73% of those without a presence are planning to enter the market. This includes 13% who intend to do so within the next year. Anuj Chande, Partner and Head of South Asia Business Group at Grant Thornton UK, said this shift indicates UK mid-market businesses are now asking "how soon" they can enter India.
Trade enhancement
CETA to strengthen bilateral trade ties
The Comprehensive Economic and Trade Agreement (CETA), signed during Prime Minister Narendra Modi's UK visit in July, is expected to strengthen the £44.1 billion bilateral trade partnership once ratified by the British Parliament. The deal is likely to simplify business setup, lower operating costs, and facilitate smoother talent mobility across borders. Sectors such as IT, finance, and consulting are expected to benefit from these changes.
Economic appeal
India's economic growth major attraction for UK firms
India's fast-growing economy and large consumer market are major attractions for UK businesses. Around 65% of British firms cited the country's economic growth as a key factor in their decision-making. Skilled talent is another major draw, with 53% highlighting India's large, qualified workforce as especially appealing for technology and professional services sectors.
Market challenges
Barriers to entry for UK businesses
Despite the opportunities, 63% of UK businesses have flagged regulation and foreign exchange controls as major barriers to entry. Around 38% have also noted infrastructure gaps and a fragmented market as hurdles. The report also highlighted that 99% of Indian firms already in the UK plan to expand, while nearly 90% not yet present intend to establish a base.