India’s domestic economy may be a bit subdued these days, but some 700 India-based companies operating in the UK are driving job creation – with many of the Indian-parented UK companies growing at more than 10 per cent annually.
According to new research by Grant Thornton, a UK auditor, UK companies owned by an Indian parent employ more than 100,000 people in total. A dozen of the companies employ more than 1,000 people each.
The 41 fastest growing companies in that list are growing more than 10 per cent year-on-year in terms of turnover, with 26 expanding at a rate of more than 20 per cent annually, including Infosys subsidiary Lodestone, Essar Energy, Tata Communications and Tata Consultancy Services subsidiary Diligenta.
“10 per cent growth in a pretty benign economic environment in the UK is very impressive by any standards,” Anuj Chande, head of the South Asia Group at Grant Thornton, told beyondbrics.
The best-performing 41 Indian companies in the UK are, unsurprisingly, in the sectors that India does best in. Some 32 per cent are in technology or telecoms, 22 per cent in pharmaceuticals or chemicals, and 10 per cent in engineering and manufacturing.
What are the ingredients of these companies success in the UK?
“I think it’s partly to do with Indian determination to succeed once they’ve set up and their focus and the sheer hard work ethic and the tenacity,” Chande adds.
The language affinity and the large Indian diaspora in the UK complement these attributes, allowing India-based companies to tap into a ready pool of UK-savvy senior managers.
As Chande explains in a statement:
In light of sluggish growth potential in India, investors are increasingly eager to enter, or scale up their UK operations as the British economy re-enters a growth phase. The UK and India’s cultural history also plays a large part in many Indian executives decisions to set up a base here, giving them direct UK market access and a springboard into the recovering European market.
The presence of Indian business in the UK has been helped by a string of overseas acquisitions since 2000 when the emerging market was growing rapidly and Indian companies were gaining international recognition – a sort of reverse imperialism.
The trend has been spearheaded by the Tata Group. Tata Tea has bought Tetley Tea, Tata Steel acquired Anglo-Dutch steelmaker Corus and Tata Motors has bought Jaguar Land Rover, all since 2000.
That last acquisition, a landmark deal involving globally recognised luxury brands, is responsible for a large part of Indian businesses’ contributions to the UK economy today, 80 per cent of the £19bn turnover generated by the 41 groups altogether. And five of the 12 biggest employers on the Grant Thornton list in the UK are Tata companies.
The report says:
Although hindered by the current economic and political situation, there is a great deal of pent-up demand among Indian businesses looking to set up in the UK. With many Indian companies having significant cash stockpiles on their balance sheets, we might expect to see some of this potential unleashed.
As part of a wider slowdown in the past two years, interest in moving into the UK has died down, but Chande says that three Indian companies have approached him in the last week alone looking at investment in the UK. It looks like this trend is about to pick up once again.
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