As negotiations around a UK-India Free Trade Agreement continue, new research from Grant Thornton UK LLP’s Business Outlook Tracker finds that India is a core focus international growth market for the UK mid-market.
The firm’s Business Outlook Tracker, which surveyed 608 mid-sized businesses in the UK, finds that over one third (36%) of UK businesses are planning to invest more in growing internationally in the next six months. Many of these businesses have their sights set on India, with 73% of respondents identifying the country as a focus international growth market.
The mid-market is already very familiar with doing business in India, with almost two-thirds (64%) of the businesses surveyed already having a business presence established. Of these, almost all (94%) have plans to expand their presence, with the majority having plans to do so within the next two years.
The opportunities that a Free Trade Agreement (FTA) would offer are also evident to the mid-market. As negotiations continue, almost three quarters (72%) of respondents agree that an FTA with India is likely to encourage their business to explore more opportunities there.
As India’s economy continues to grow in strength, the mid-market sees many benefits to establishing a business presence in this market. The top three benefits identified by the research are:
- A fast growing and stable economy
- A large working age population
- A large consumer market
However, while establishing a business presence in an international market can offer numerous opportunities, it also presents challenges. The biggest barriers for the mid-market to building a business presence in India identified by the research are:
- High tariffs and protectionist policies
- Ease of doing business
Anuj Chande OBE, Head of South Asia Business Group, Grant Thornton UK LLP, said, “India is now the fifth largest economy in the world and is predicted to become the third largest by 2030. It therefore presents a huge opportunity for growth for businesses in the UK.
“As the country is only set to continue to grow, it is an excellent time for both those with an existing presence, and those looking to India for the first time, to be exploring potential opportunities in this market. India offers a stable and certain economic environment for investors and businesses, with, not only a fast-growing economy, but also a large working age and consumer population.
“The anticipated UK-India Free Trade Agreement should also help propel the relationship between the two countries further and provide an excellent platform for further investment.
“An FTA should reduce tariffs and duties to allow for a more level playing field for overseas businesses and give greater access to a large and fast-growing market. It should also allow for the relaxation of certain regulations and help improve the ease with which businesses in the UK can look to do business with, or within, India.
“While our research has identified the biggest challenges many businesses face when setting up in India – as there are challenges looking to grow internationally anywhere in the world – there is support available.
“The Department for Business and Trade provides support to those seeking to trade or invest in India, while firms, such as ours, can also provide tailored support for businesses exploring new markets.”