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India held on to its rank as the second-largest source of foreign direct investment (FDI) into the UK for 2020-21 despite the multiple headwinds of a pandemic and Brexit hit economic landscape.
Indian companies invested in 99 projects and created 4,830 jobs in the UK to retain India’s position as the second-largest source of foreign direct investment (FDI) after the US in the past year, according to new UK government figures released this week.
The Department for International Trade (DIT) inward investment statistics for 2020-2021 reflect an impact of the COVID-19 pandemic and post-Brexit changes as the number of projects and jobs dropped in comparison to the 2019-20 figures of 120 projects and 5,429 jobs. The US data also registered a drop, with its 389 projects and 19,301 new jobs in 2020-21 lower than the 462 projects and 20,131 jobs it had clocked in the previous year.
“The UK economy showed its underlying strengths, attracting investment from around the world. The USA continues to be our biggest investor, with India second,” said the Department for International Trade (DIT).
“France, Germany and Canada all continue to invest strongly in the UK. Meanwhile Sweden, Switzerland, the Netherlands and South Africa increased the number of FDI projects last year compared to 2019-20,” it said.
According to the statistics, foreign investment into the UK created 55,319 new jobs across the country last year, with 48,000 of those a result of direct DIT intervention with the investing companies helped with their entry into the UK.
“From Scotland to the South West, the UK remains one of the most attractive destinations in the world to invest in. Today’s foreign direct investment figures prove we’re resilient and strong in the face of economic uncertainty, and we know that more trade equals more jobs,” said UK International Trade Secretary Liz Truss.
“As we strike trade deals across the globe, we’re opening up even more opportunities for investors, exporters and businesses to grow, creating jobs, boosting the economy and levelling up the entire UK as we can build back better from the pandemic,” she said.
Industries like food and drink, creative and media, environment, infrastructure and transportation, as well as biotechnology and pharmaceuticals all contributed to the job creation across all parts of the United Kingdom.
New jobs created by FDI projects in the South West were up 52 per cent in the last financial year. The East of England and West Midlands attracted a higher number of new jobs than pre-pandemic levels, and Scotland saw a new jobs boost of 10 per cent from 2,946 in 2019-20 to 3,254 in 2020-21. Wales attracted 72 new investment projects, up from 61 and 52 in previous years.
UK Minister for Investment Gerry Grimstone said: “Driving inward investment into all corners of the UK to help boost the economy and create jobs is our top priority. Amid the unprecedented challenges caused by the Covid crisis, it’s fantastic that Scotland and regions like the Midlands have secured new jobs and prosperity.
“DIT works closely with investors across the globe to make the UK the destination of choice for investment.”
DIT referenced recent analysis by the United Nations Conference on Trade and Development to highlight the UK’s leading place in the world as an FDI destination, with the total inward FDI stock increasing from $2.1 trillion in 2019 to $2.2 trillion in 2020. This marks the second highest in the world after the US.
The UK government stressed that it is further ramping up efforts to attract investment and increase exports, having recently launched four major new trade and investment hubs in Scotland, Wales, Northern Ireland and the North-East of England.
A new Office for Investment, announced by UK Prime Minister Boris Johnson last year, is designed to further resolve potential barriers to investment, support existing investors and land high-value, high-impact investment for a boost in economic recovery for the country.
The latest figures come at a time when the UK is aggressively pursuing its free trade Global Britain agenda, now free to negotiate its own agreements outside the European Union (EU).
After clinching a crucial free trade agreement (FTA) with Australia recently, it kick-started formal negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), made up of 11 countries belonging to an estimated £9 trillion free trade area.
The CPTPP is made up of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, with the Philippines, Thailand, Taiwan and the Republic of Korea said to have plans to join. The UK said joining the trade bloc would give the country’s exporters and services firms better access to these dynamic markets and boost growth and support British jobs.
“Membership of the CPTTP free-trade partnership would open up unparalleled opportunities for British businesses and consumers in the fast-growing Indo-Pacific,” said UK Prime Minister Boris Johnson.
“It’s an exciting opportunity to build on this country’s entrepreneurial spirit and free-trading history to bring economic benefits across the whole of the UK,” he said.
It forms the central feature of a so-called Indo-Pacific tilt of a post-Brexit foreign policy agenda, with an FTA with India as part of Roadmap 2030 another crucial aspect of that tilt.