UK Businesses Positive to Work in India
"In spite of new challenges to business such as Brexit, COVID-19, and the global economic slowdown, UK companies not only remain deeply committed to India, but many are optimistic of expanding their business footprint in India," said Jayant Krishna, UKIBC Group CEO.
UK Minister for Investment, Lord Gerry Grimstone, has released UK India Business Council’s ‘Doing Business in India Report 2020’ at a roundtable with Indian industry captains during his virtual visit to India.
Findings from the UK India Business Council’s Doing Business in India Report 2020 show that UK businesses believe that India’s business environment is improving, and they see an opportunity for greater UK-India collaboration notwithstanding Brexit, COVID-19 and the global economic slowdown. India’s Atmanirbhar Bharat mission is seen by the UK firms as an opportunity to do more business in India, leveraging UK’s innovation for manufacturing in India.
The report is the UKIBC’s sixth of an annual series dating back to 2015. This year’s report is based on an in-depth survey of 106 UK organisations operating in India spanning manufacturing, services, and higher education sectors.
66 per cent of the surveyed businesses said that they believe it is getting easier to do business in India, thanks to progressive reforms and improvements in components of India’s business environment such as the availability of support and service providers, skilled labour, and supply chain.
“Alongside the progressive trend in the rating of India’s business environment and the phased removal of barriers to business since the inception of UKIBC’s report in 2015, the findings of our 2020 report are not only very positive but hugely encouraging. In spite of new challenges to business such as Brexit, COVID-19, and the global economic slowdown, UK companies not only remain deeply committed to India, but many are optimistic of expanding their business footprint in India,” said Jayant Krishna, UKIBC Group CEO.
The survey suggests that India’s self-reliant mission, or Atmanirbhar Bharat, stands for greater global integration for the Indian economy. More than three quarters of respondents were positive about Atmanirbhar Bharat, believing it is an opportunity to do more investments in India and expand the trading ties.
It seems that the Atmanirbhar Bharat mission is ushering in a unique potential for co-development and co-creation among UK and Indian firms, leveraging the UK’s innovation for manufacturing in India.
“The positively-balanced findings of this report are tremendously encouraging. There is much still to do to remove the persistent barriers to doing business in India, particularly improvement to bureaucratic procedures and the application of the tax regime, which is a persistent concern for businesses in India. Yet, the optimism and commitment amongst UK businesses is telling of the strength of the UK-India relationship and scope for growth,” said UKIBC Chair, Richard Heald, OBE.
This report comes at a time where the UK and India have committed to an Enhanced Trade Partnership, as agreed by UK Secretary of State for International Trade, Liz Truss, and Indian Minister of Commerce and Industry, Piyush Goyal, in July 2020.
Although a Free Trade Agreement (FTA) is an eventual goal, the immediate priority is to remove market access barriers and make it easier for companies to operate in and enter the Indian market.
India has surely made significant progress on ease of doing business, but regulatory uncertainty remains a significant challenge. Legal and regulatory barriers were the most frequently cited obstacle to business, as outlined by 51 per cent of respondents.
Foreign exchange regulations, Goods and Services Tax (GST) process issues, high import tariffs, lack of alignment with international standards remain the top four regulatory irritants.
The survey suggests that improving bureaucratic processes with greater accountability, increasing regulatory certainty, simplification of the GST processes, improving the quality of infrastructure and making single window clearance effective were the most sought-after reforms by UK businesses, in that order.