Grant Thornton’s International Business Report (IBR), which surveys the expectations of around 3,500 senior executives in 31 economies every quarter, revealed in its latest analysis that a UK-India free trade agreement (FTA) is being closely watched by businesses on an expansion mode on both sides.
Almost all (92 per cent) of the Indian businesses surveyed said an FTA would encourage them to explore opportunities in the UK market, with 72 per cent of UK businesses saying the same. The majority (90 per cent) of the Indian businesses surveyed also have a good understanding of the potential provisions and implications for business from an FTA, compared to 72 per cent of UK businesses.
Anuj Chande OBE, Head of South Asia Business Group at Grant Thornton UK LLP, said: “The FTA between India and the UK offers an opportunity to amplify the possibilities recognised by businesses on both sides of the UK-India corridor, positively impacting economic collaboration between the two countries.
“For example, greater market access and easing of visa restrictions would pave the way for further growth in trade and investment in both countries.”
The UK and India have been negotiating the FTA since the previous Conservative government was in charge, with the recently elected Labour government reiterating its commitment to taking this forward from the fourteenth round of negotiations. UK Foreign Secretary David Lammy’s visit to India in July, when both sides clinched the Tech Security Partnership, was seen as part of this momentum behind a closer economic partnership.
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Meanwhile, Grant Thornton’s IBR found much optimism within the UK-India corridor, with 89 per cent of mid-market Indian businesses referring to the UK in their growth preferences and 61 per cent of UK businesses had a similar view of India as a market for expansion. Strong infrastructure, innovation ecosystem and digital competitiveness were among the factors highlighted as positives of the UK market among the Indian businesses surveyed.
Respondents also highlighted some barriers to doing business in the other country focusing on ease of doing business, regulatory compliance, and high costs.
Chande added: “Combined with the complexity of the UK’s immigration and visa policies, which require detailed business documentation and proof of economic contribution, it’s evident that there are challenges for any business looking to invest here.
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“Streamlining regulatory processes and simplifying compliance, could help to alleviate operational burdens for Indian businesses looking to the UK. This would help facilitate their entry into the UK market and promote a more conducive environment for business growth.”
*Info: Grant Thornton
