68% Of 635 British Firms In India Are MSMEs with nearly 6.67 Lakh employees: Report

Approximately 68 per cent of the 635 UK-based companies operating in India fall under the category of micro, small, and medium enterprises (MSMEs). Notably, 60 per cent of these UK-affiliated MSMEs are headquartered in London, according to the findings of the ‘Britain Meets India 2023’ research, jointly conducted by Grant Thornton and the Confederation of Indian Industry (CII).

The survey identified a total of 635 companies registered in India but operating either directly or indirectly from the UK. It's important to note that the UK boasts 5.5 million SMEs, constituting 99 per cent of all businesses and employing 60 per cent of the private sector workforce in the country. Furthermore, in 2019, 98 per cent of the approximately 9,900 exporters from the UK to India were classified as MSMEs.

The surveyed 68 per cent UK MSMEs in India comprise 47 per cent micro and small enterprises with turnover less than INR 50 crore and 21 per cent medium enterprises with turnover between INR 50 crore and INR 250 crore.

Among the UK's MSMEs operating in India, the technology sector dominates the most in terms of combined turnover of micro and small units, comprising 23 per cent of the total. Following closely behind are the industrial products sector at 18 per cent and segments related to consumer goods, e-commerce, and retail at 13 per cent. Additionally, significant contributions are made by business services (12 per cent), media and telecom (12 per cent), and financial services (10 per cent) among the dominating sectors, the research noted.

These UK-affiliated MSMEs collectively generate a turnover of approximately INR 4,888.4 billion and provide employment to nearly 6,66,992 individuals in India. Comparatively, in 2022, there were 618 UK MSMEs operating in India. Among these enterprises, Vedanta Ltd, a natural resources company, emerged as the largest in terms of revenue, with a turnover exceeding INR 1,353 billion. On the other hand, G4S, a security company, ranked as the leading UK employer in India, with approximately 1.35 lakh employees.

Citing another report by Grant Thornton UK, Pallavi Joshi Bakhru, Partner and India-UK Corridor Leader at Grant Thornton Bharat, highlighted that over one-third (36 per cent) of UK business leaders are planning to invest more in growing internationally in the next six months, with 73 per cent of respondents identifying India as a focused international growth market.

“India continues to be a large and growing economy with a burgeoning consumer base, sizable skilled workforce, and government commitment to economic development. The anticipated India-UK Free Trade Agreement (FTA) should further boost the relationship between the two countries and provide an excellent platform for further investment,” Bakhru said.

The research highlighted that the UK is considered to be one of India’s most important trading partners with a bilateral trade relationship worth over £35 billion. The UK has also been a major investor in India with FDI inflows of £27.4 billion between April 2000 and March 2023.

The Research Highlights Key Factors Of Growth In India:

India’s growing scientific and technological prowess with recent successful Moon mission.

One of the fastest growing economies despite significant global challenges, including the rise in geopolitical tensions, inflationary pressures, and the tightening of global monetary policies.

Investment in transport infrastructure such as roads, railways, airports, and ports for improved connectivity, making it easier for businesses to operate in India.

As per the World Bank’s Logistics Performance Index (LPI) 2023, India was ranked 38th out of 139 economies — an improvement of six positions from the previous year. This is an encouraging indication that the government’s Ease of Doing Business (EoDB) reforms have a positive impact, the research said.

The research also noted that India has a young and growing population with a median age of 28.2 years. This sizable, skilled, and young workforce is helping to drive economic growth. India’s focus on improving EoDB and investing in infrastructure, combined with a young and growing population, are creating a favourable environment for businesses.

As per the report, 36 per cent of the surveyed UK companies are based in Maharashtra, 29 per cent in Delhi NCR, 18 per cent in Karnataka, 7 per cent in Tamil Nadu, 4 per cent in Gujarat and Telangana respectively, and the other 6 per cent are operating in other states.

In recent years, India and the UK have signed a number of important agreements, including a 2030 Roadmap for India-UK relations under the themes of people to people connect, trade and prosperity, defence and security, and health and climate. The UK has a large Indian diaspora with over 1.6 million British nationals of Indian origin.