What influence has Covid-19 had on the UK-India FDI relationship?

According to GlobalData’s FDI Projects Database, the UK received 804 greenfield foreign direct investment (FDI) projects in 2020, while India received 562.

The number of projects entering the UK declined substantially in 2019, falling by 23% from the previous year. During the same time period, the number of greenfield FDI projects in India dropped by 33%.

Outbound FDI from the United Kingdom to India

In India, 54 projects were launched by UK-based enterprises in 2020. In comparison to the previous year, this was a 3.6 percent decline.

Financial services, software and IT services, and business and professional services were the primary industries in which UK-based corporations invested in India. These three industries together accounted for 72 percent of all UK outbound FDI projects headed for India in 2020.

Financial services (17 percent of total UK foreign FDI in the sector), coal, oil and gas (11 percent), and textiles (10 percent) obtained a bigger percentage of UK outbound FDI than other industries.

Cashaa Technologies, InterContinental Hotels Group, and Standard Chartered were among the top UK-based investors in India. In 2019 and 2020, these enterprises together accounted for 25% of overall project flows.

India was the fourth-largest receiving country in terms of total UK outbound FDI projects in 2020. In 2019, it was the ninth-largest beneficiary.

Rajasthan was mostly built by corporations located in the United Kingdom. In fact, by 2020, 23 percent of UK companies’ projects in India would be based there. The next most popular subnational destinations were Karnataka and Maharashtra.

FDI from India into the United Kingdom

In the year 2020, 16 projects in the UK were built by Indian enterprises. In comparison to the previous year, the number of initiatives dropped by 20%.

The main areas in which Indian companies invested in the UK were software and IT services, automotive, and business and professional services. These three industries together accounted for 63 percent of total Indian outbound FDI projects scheduled for the United Kingdom in 2020.

Cox & Kings, Infosys, and Mahindra Group were among the top Indian-based investors in the UK. In 2019 and 2020, these companies accounted for 17 percent of the total number of India-based ventures established in the UK.

In 2020, the United Kingdom was the second-largest beneficiary of Indian outbound FDI. In 2019, it was likewise the second-largest recipient.

India-based businesses generally set up shop in Greater London. Greater London would be home to 45 percent of all Indian outbound projects intended for the United Kingdom by 2020. The West Midlands and the North East came in second and third, respectively.