Indian foreign investment into the United Kingdom increased by 110 per cent in 2005-06, British High Commissioner to India, Sir Michael Arthur, announced in New Delhi on Wednesday. During the 2005-06 financial year, the UK recorded a total of 76 investment projects from India, creating 1,449 jobs.
Thanking Indian businesses for their continued commitment to UK-India business relations, Sir Michael said: "With Indian businesses investing £ 1.02 billion into the UK, India now ranks as the third largest foreign investor in the UK globally, and the second largest from the Asia Pacific region."
"The last financial year was yet another record breaker in terms of investment from India into the UK, demonstrating that the UK continues to be the leading investment location in Europe for businesses from India,: he added.
"Having been on the top 10 FDI league table for several years, and now third, shows that success follows success. I encourage Indian companies going global, to continue using the UK as their international base and gateway into Europe. The UK is the place where the world's best companies and entrepreneurs want to be," said Sir Michael.
Releasing the '2005-06 UK Investment Review Report', Mark Dolan, UK Trade & Investment Deputy Director India, Inward Investment, said: "The flow of Indian investment to the UK has turned from a trickle in the late 1990s to a flood, with the scope and breadth of projects rapidly expanding. While ICT remains the dominant sector for investment, there was strong growth in investments in pharmaceuticals and engineering. At the same time, more Indian companies are looking outside London reflecting the deepening of our investment relationship."
"The big rise occurred as a result of Indian investors taking advantage of UK's expertise in high-value activities such as R&D, science, cutting-edge technology, innovative design and as a base for European headquarters. The growth in Indian investment was also driven by the forces of globalisation and market liberalisation as Indian companies ventured abroad for new opportunities, markets and sources of growth, skills and technology," Dolan said.
UK Trade & Investment on Wednesday released its 'UK Inward Investment 2005-06 Report'. In 2005-06, 1,217 foreign companies from around the world chose to invest in the UK -- a 14.3% per cent increase over the previous year. The US, with 446 projects, Japan, with 84 projects, and India, with 76 projects, are the top three investors.
The 76 new projects from India include 39 from Mumbai, 10 from New Delhi, 22 from Bangalore, Chennai and Hyderabad, and 5 from Kolkata. While ICT remains the dominant sector for investment with 26 projects, there was strong growth in investments in pharmaceuticals and healthcare (12 projects), financial services (8 projects) and automotive and engineering (6 projects).
The key projects from India include:
- Essel Propack Ltd acquired Arista Tubes and Telcon Packaging in the UK for a combined value in excess of £6.4 million, and safeguarded 200 jobs. The company plans fresh investments worth £2.7 million in the UK.
- Nicholas Piramal India Limited acquired the global marketing rights and technical know-how of Inhalation Anaesthetics business from Rhodia Organique Fine Limited, UK, for £8.9 million in 2005.
- NPIL also completed 100% acquisition of another UK company, Avecia Pharmaceuticals Limited, for £9.5 million. As part of this acquisition, NPIL also bought 25% equity in Reaxa Limited, UK. Reaxa is a technology company based in Manchester
- As part of their global expansion plans, NPIL recently acquired a manufacturing plant from Pfizer, the drug giant in Northumberland, UK, gaining a strong foothold in the UK bio-pharma sector.
- With these three acquisitions, NPIL today employs more than 650 people in the UK.
- The State Bank of India, India's largest bank, recently opened branches in Manchester, Leicester and Birmingham. SBI has been operating in London and has had a presence in the UK for more than 80 years.
- El Forge, a Chennai-based supplier of automotive components, acquired Shakespeare Forgings Limited, Birmingham, which serves the auto, agricultural and mining sectors in the UK.
- EoN PreMedia Private Ltd, an integrated production house for print and digital media, recently set up its European headquarters in London serving as a services hub for Europe. They provide publishers and marketing companies with design, content management and pre-press services for print and digital media. The company's production facility is based in New Delhi.
- TechUnified UK Pvt. Ltd, a software products and services company based in Bangalore, established its UK base in May 2006. The company is now in the process of developing an innovative voice banking product called 'Voice Connect'. Its mobile banking product 'Customer Connect' is well established in the Middle East and will be leveraged in the UK.
- Mahindra & Mahindra Ltd is the flagship company of the £1 billion Mahindra Group. The Mahindra Group recently announced their acquisition of UK's Stokes Forgings where 285 jobs were safeguarded. The deal is estimated at £7.5 million.
- Tech Mahindra (earlier Mahindra British Telecom) is a leading telecom IT solutions provider, with a presence in the UK.
- Godrej Group, one of the largest engineering and consumer products company in India, has a presence in the UK through Godrej International (the company's trading arm in the UK). Godrej Consumer Products recently acquired Keyline Brands, a London-based consumer products company, for £16 million. 50 jobs were safeguarded.
- The consulting arm of DreamQuest Pvt. Ltd, a leading IT infrastructure provider based in Bangalore, is spearheading its international expansion into Europe via a regional headquarters established in the UK.
- Kolkata companies see the UK as an investment destination with great potential. The Apeejay Surrendra Group, one of the largest producers of tea in India and a workforce of 40,000 (including all categories), acquired Typhoo, UK's 100-year-old iconic British brand, at £80 million.
This was India's 2nd largest global FMCG acquisition and the 7th biggest corporate takeover by an Indian company, to date. This gives Apeejay significant opportunity to vertically integrate its tea business as well as expand their footprint in international markets.
- A growing number of Indian companies are listing on the London Stock Exchange to raise their international profile, tap some of the world's largest pools of capital and gain entry into European and global markets. Recent listings include IT services firm Rolta India ($100 million), Nagarjuna Construction ($115 million), Bajaj Hindustan ($135 million) and Federal Bank ($80 million).