Context:
UK Trade Secretary Jonathan Reynolds and Investment Minister Poppy Gustafsson visited India this week to strengthen economic ties. Though the UK announced 17 new export and investment agreements, the declination of their details was yet to be made.
Major Areas of Takeaways from the Visit
- Increased UK Investment in India
- The UK’s technology sector is rapidly rising in India and is the third largest globally.
- Several UK technology and life sciences companies announced plans for growth in India.
- Benefit for UK Insurance Companies
- FDI limits in insurance have been raised from 74 percent to 100 percent in India under the Union Budget 2024-25.
- The policy shift will open up the Indian market for British insurers to own and grow operations.
- Investment of India in the UK
- There have been investments of more than £100 million from India for different countries, covering sectors including AI, professional services, and textiles in the UK.
- Further, all these will create hundreds of new jobs over the next three years.
- Strong Linkages of Economic Ties between UK and India
- More than 950 Indian owned companies operate in the UK, whereas 650 UK firms are present in India.
- These all together support more than 600,000 jobs across both their economises.
The UK considers technology and life sciences as areas of future growth in India.
This type of arrangement could be valuable in accelerating the India UK Free Trade Agreement (FTA) negotiations, as trade discussions continue. The extended insurance FDI cap opens up huge business avenues for UK financial institutions in India.
