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    Indian Investments in UK May Soon Dry Up

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    Indian investors are wary of engaging with the UK following Brexit. Industry experts say that in the long run, India will have an upper hand in bilateral trade.

    NEW DELHI (Sputnik) — A survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI), the largest body of industries in the country, indicates a major shift in the trade pattern between India and the UK, post Brexit.

    The survey concludes, a "Brexit transition may lead to moderation in investments flows to the UK from India. However, India is expected to get continued attention from the investors including investments from the UK."

    Responses were received from about 45 companies covering sectors such as education, information technology, tires, pharmaceuticals, steel and steel products, automotive, textiles, apparel, financial services etc.

    • 51% of the participants anticipated a decline in investments to the UK over the next three to five years. 
    • 43% of the survey participants anticipated a decrease in intra company transfers/movement of professionals to the UK from India over the medium term (next 3-5 years).
    • 43% respondents cited a decrease in Indian migration to the UK over the medium term (next 3-5 years).

    Indian investments in the UK are higher than their combined investments in other European countries. In fact, the total number investments by Indian companies make India the UK's third largest foreign investor.

    Nevertheless, Indian industry representatives say that after the initial commotion dies down, the consequences will largely be in India's favor. They believe that given the strengths of the economy, it may be worthwhile to look at a bilateral Free Trade Agreement with the UK and this should focus on goods, services as well as investments. The survey notes, "Business leaders feel that the UK may now take a less rigid stand compared to the EU and it may be worth pursuing a broad based bilateral agreement."

    Indian business leaders feel that education in the UK is expected to become more affordable and we might see the UK wooing candidates with more incentives. For Indian students studying in the UK, Brexit might result in a more level playing field compared with other EU students who had an informal edge over the rest of the world in the job market. India, being one of the largest skilled labor markets, with a population well versed in the English language, could have a distinct advantage.

    The UK is third largest investor in India and accounts for about 8 % of the total foreign direct investment (FDI) inflows in the country. In fact, several British companies have exhibited interests in India following the launch of the Make in India campaign.


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