Post-Brexit UK has much to gain from Indian job creation

'India Global Business' reviews India's growing investment interests in the UK as the second-largest job creator for the country. Official UK government statistics for 2015-2016 reveal India's firm hold among the top three source markets for foreign direct investment (FDI) into the UK. With the shadow of Brexit hanging over India-UK ties, the latest figures for Indian investment into Britain paint a fairly promising foundation for the UK to build on. As the country negotiates its terms of exit from the European Union (EU) and seeks to strike out stronger partnerships with other economies, there are clear reasons why India should be top of its list. According to official UK government figures recently released by the Department of International Trade, rebranded from the erstwhile UK Trade and Investment (UKTI) and headed by new minister Liam Fox, India has held on to its firm grip as the third-largest investor and the second-largest job creator. Indian companies created 7,105 jobs last year, through 140 projects. It is second only to the United States of America, which created 25,694 jobs, and ahead of Germany, which is third with 5,291 jobs from 99 projects. While the US remains the biggest source of inward investment, accounting for 570 projects, China grabs the second spot with 156 projects. The latest investment figures come as a boost following the Brexit vote in June, as the country also emerged as the most popular destination in the European Union for overseas firms. The UK recorded a total of 2,213 inward investment projects, up 11 per cent on the previous year, with 116,000 jobs "created or safeguarded" by overseas investment last year. "These impressive results show the UK continues to be the place to do business. We′ve broadened our reach with emerging markets across the world to cement our position as the number one destination in Europe for investment," said UK international trade secretary Liam Fox, while in India to hold talks with finance minister Arun Jaitley and commerce minister Nirmala Sitharaman. “The UK-India partnership lies at the very heart of the strategic relationship between our two nations, a relationship that has never been more important than it is today,” he said. Britain cannot engage in formal trade talks with other nations while it remains a member of the EU but informal talks on the idea of future deals can be discussed. Once Article 50 is invoked and the official process for Britain's exit from the economic bloc is set in motion, the UK is reportedly keen to strike pacts with emerging markets like India and China. While in India, Fox also met major Indian companies in the information technology sector including HCL and Tech Mahindra. “The UK is the investment destination of choice for Indian ICT companies, and the secretary of state [Fox] discussed future investment opportunities in the UK,” his department said in a statement. This was the fourth visit by a British minister to India since Theresa May took over as the Prime Minister of the UK last month. UK secretary of state for business and energy Greg Clark and secretary of state for international development Priti Patel visited India in August. Another minister, Alok Sharma, who took charge as minister for Asia in the UK Foreign Office, was the first to make a tour of India under the Theresa May led administration in July. Soon after returning from India in early September, Fox revealed in the House of Commons that he had held discussions with the Indian government on removing trade barriers. He said: "We have now concluded a deal to set up a trade working group with India to look at how we will remove barriers to trade before we negotiate a free trade agreement on our exit from the European Union (EU).

"There is nothing to stop us having discussions and scoping out future agreements." His intervention came a day after May herself had told the Commons that India would be one of the key countries of focus in a post-Brexit trade scenario for the UK. "As we leave the EU we will forge our own trade deals. The leaders from India, Mexico, South Korea and Singapore said they would welcome talks to remove trade barriers. President Xi also made clear that China would welcome discussions about trade with the UK," she said. Britain's figures on the recorded FDI projects include investments which received support from DIT and/or one of its regional and local partners ('involved' projects), as well as 'non-involved' projects, meaning those projects which have 'landed' in the UK without any involvement from DIT or partners. Various external sources and FDI project and company databases have been used to identify, qualify and report eligible 'non-involved' FDI projects. DIT's definition of FDI projects covers wider types of investment, including those projects which are not announced by companies. This and other differences in methodology and verification processes explains the difference in the FDI project numbers published by DIT and other organisations, such as FT and EY. Job figures and investment values included in the government report are estimates, made at the start of each investment project. New jobs capture total jobs likely to be created within three years from the start of the project. Safeguarded jobs include those jobs which were 'saved' as a result of the additional/ new inward investment.