Despite an unsettled environment for business over the past year, Indian companies continued to make a significant contribution to the UK economy.
Our research has identified almost 850 Indian companies operating in the UK, with combined revenues of £41.2 billion. Together, they paid £461.8 million in corporation tax and employed 110,793 people. While the revenue and tax figures are lower than for 2018, they still remain strong in the context of Brexit uncertainty through 2019, and a challenging business environment for India during the same period.
Fastest-growing Indian companies
Each year, the India Meets Britain tracker, developed in collaboration with the Confederation of Indian Industry, identifies the fastest-growing Indian companies in the UK. This year, 72 companies, up from 62 in 2019, achieved an annual growth rate of 10% or more. Between them, these fastest-growing companies earned total revenues of £3.8 billion. And their average annual growth rate accelerated to 40%, up from 37% in 2019. A full list of the UK's fastest-growing Indian companies is included in 2020 India tracker.
Fastest-growing sectors in the India Meets Britain tracker
Technology and telecoms companies dominate the tracker for the seventh year in a row, accounting for 38% of 2020 tracker companies. Pharmaceuticals and chemicals, and engineering and manufacturing, are also well represented, accounting for 15% and 14% of tracker companies respectively.
As in previous years, London is the preferred location for Indian companies based in the UK. This year, 54% chose the capital as their base, with the north attracted 14% of companies and the south, 11%.
Impact of COVID-19
Our 2020 research findings are published under the shadow of the COVID-19 pandemic. As the world addresses the immediate challenge of minimising loss of life, the economic consequences of the pandemic are only just coming into view. However, the UK’s Office for Budgetary Responsibility has warned the UK economy could shrink by 35% in the second quarter of 2020.1 The International Monetary Fund has forecast economic growth of 1.9% for India in 2020–2021, compared to substantial higher rates in prior years. This is in the context of a forecasted 3% contraction of the global economy due to the COVID-19 epidemic.2
Against this backdrop, we are advising our clients to follow a three-stage approach to developing their COVID-19 response across different areas of their business:
- Assess the situation for each individual business
- Implement strategies to protect the business during the crisis
- Consider how best to restore the business as lockdowns are eased and the world starts on the path to economic recovery.
UK-India prospects post-Brexit
The COVID-19 pandemic has diverted attention from the UK’s ambition to negotiate a trade deal with India. Nevertheless, a deal is still very much a priority for the UK post-Brexit. Although it will take some time to negotiate, India and the UK have been working on ways to improve trade for the last two years and have agreed to put in place building blocks that will eventually aggregate into a trade agreement.3 New bilateral working groups in food and drink, healthcare and data services indicate where the two countries see most potential.
If you would like to discuss any matters arising in this publication or find out more, please contact Siddhartha Nigam.
- UK economy could shrink by 35% with 2m job losses, warns OBR The Guardian, 14 April 2020
- India to grow 1.9%, global economy to shrink 3%: IMF Times of India, 15 April 2020
- UK putting in place building blocks for trade pact, say UK High Commissioner BusinessLine, 30 Janaury 2020
Grant Thornton has been working closely with businesses in the India-UK corridor for nearly three decades.
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National Managing Partner, Growth Advisory