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India Enjoys Growing Trade and Investment From the UK

India Enjoys Growing Trade and Investment From the UK

  • Modified On: January 12, 2026

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India and the UK share long historic ties and as one of the leading G20 investors, the UK has made an investment of 29.56 billion USD in India since 2020 and the number of UK businesses has jumped more than two times during this period with many new India company formation.

The sectors that have been witnessing strong investment growth are healthcare, consumer goods, retail, and infrastructure. Both the countries have long been working to strengthen and improve the trade and investment relationship including enhancement of collaboration in technology and pharmaceuticals.

India having the world’s third-largest startup base can join hands with the UK which has the third-largest Unicorn base in the world to create business growth and employment.

There is no bilateral free trade agreement (FTA) between the UK and India however as a part of a roadmap to future FTA and during the 14th Joint Economic and Trade Committee (JETCO) meeting convened in 2020; trade and investment ministry officials from both countries committed to set up Enhanced Trade Partnership (ETP) between the two countries expected to be officially launched during the visit of the UK Prime Minister during 2021.

UK Investment Status in India

In collaboration with the Department of International Trade (DIT) and Confederation of Indian Industry (CII), Grant Thornton Bharat a reputed consultancy firm in its ” Britain Meets India” report emphasized a stronger trade and investment relationship between India and the UK, especially after covid and post-Brexit. The report highlighted some facts about some information on UK investment in India as under

  • UK FDI in India increased from USD 898 million in 2015-16 to USD 1,422 million in 2019-20.
  • 572 UK companies in India contributed a total turnover of 46.73 billion USD providing direct employment to 416,121 people
  • The goods and services sector contributed to 26.7 billion USD during 2020
  • India is the preferred country for the UK for economic partnership especially post Brexit
  • Top-ranked sectors being watched by the UK companies are industrial and business service sectors with Maharashtra topping the list of preferred investment destinations followed by Haryana, Delhi, Tamil Nadu, Telangana, and Karnataka.
  • Enhanced and continued business collaboration during post covid made India-UK trade and investment partnership stronger.
  • Supply chains for Indian pharmaceutical products and surgical masks remained uninterrupted for the UK and other countries as humanitarian gestures including future investment for mutual economic prosperity
  • Relentless collaboration between the two countries in the research, design, and manufacturing of vaccine has further enhanced the investment relationship between the two countries
  • Dyson Technology, Aviva Life Insurance, Diageo Business Services, RMD Kwikform, and FMC Technologies have been termed as the fastest growing UK companies in India, and Vedanta, Vodafone, Hindustan Unilever, United Spirits India have become the top 20 UK companies by revenue.
  • Top UK employers in India include G4S Group, Vedanta Resources, and HSBC Holdings

Sector-Specific Business Opportunities in India for UK Investors

As per Invest India report, the following Indian business sectors are drawing maximum interest amongst the UK investors.

Indian Chemicals sector nearly contributes to 3 percent of world production of chemicals with more than 80,000 products and generating more than 2 million people and permitting 100 percent FDI through faceless automatic route. Tata Chemicals, Atul, Reliance, and Asian Paints are major players in this segment.

The electronics and Telecommunications sector with smartphone manufacturing is the second-largest in the world with a projected turnover of approximately 400 billion USD by 2025. FDI up to 100 percent is allowed through an automatic route. Consumer and industrial electronics, computer hardware, and LEDs do also come under this sector and Samsung, Apple, LG, Intex are the major players.

The Food Processing segment is the second-largest in the world and dairy, fruits, vegetables, poultry, fisheries come under this sector with 55 mega food parks spread across the country. Britannia, Nestle, Amul, and Hatsun Agro are some major players, and 100 percent FDI is permitted through the automatic route.

The E-commerce and Retail sector is the third-largest in Asia and online grocery, e-pharmacy, and social commerce are the sub-sectors. 100 percent FDI is allowed and Adidas, Marks & Spencer, Dyson are some major players.

Aerospace and Defense sector with the second largest armed forces and worth 42.7 billion USD allowing 49 percent FDI under automatic route and 100 percent under the government route with BEL and HAL being the major players.

The IT and Business Process Management (BPM) sector contributes to 8 percent of the country’s GDP with more than 500,000 high skilled professionals.

Why Choose India Over Other countries

As per the recent forecast, India would be the third-largest economy in the world with a huge domestic market and has considerably eased the process of How to register a private limited company in India for improving the country’s ranking in the ‘ease of doing business index.

The following are some reasons that are attracting overseas investors to do business on Indian Soil

  1. India has received 73.45 billion USD FDI inflow in 2019-20 and one of the fastest-growing economies
  2. Global maritime trade to shift from the Pacific to Indian ocean providing India growing economic influence
  3. India improves its position in global innovation index 2020
  4. India has the largest youth population in the world
  5. National Infrastructure Pipeline initiative has been announced and is being undertaken for providing world-class infrastructure facilities
    Rising global
  6. competitiveness and drastic improvement in Global Competitiveness Index

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