The UK is the largest G20 investor in India and the biggest Indian job creator through direct investment.
According to a joint report published today by the Confederation of British Industry (CBI) and consultancy firm PwC, the UK invested $24.07bn between 2000 and 2016.
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Over the 16 year period, the chemicals industry in the south Asian country received $6.1bn worth of UK investment and pharmaceuticals received $4.1bn.
UK investment also created 371,000 jobs in India.
The total number of people employed by British companies in India currently stands at 788,000, the equivalent to one in 20 private sector jobs.
UK companies are primarily attracted to the size and economic growth potential of India’s market, but also its manpower.
India is considered the tenth most attractive destination in the world in terms of foreign direct investment (FDI), overtaking China, according to the World Investment Report 2016, published by the United Nations Conference on Trade and Development (UNCTAD).
“The Indian Government’s efforts to improve the business environment are clearly bearing fruit, and British businesses of all sizes and from across sectors have continued to spread right across this exciting and fast-changing market,” said Patricia Hewitt, chair of the UK India Business Council.
Maharashtra, India’s third-largest state, received the maximum investment from the UK at $7.47bn between April 2000 and September 2016.
As a result, over 60,000 jobs were created there.
Between April 2015 and September 2016, nearly a quarter of UK investments went to Delhi, the Indian capital.
“It’s really encouraging to see the vibrant economic relationship between India and the UK continues to flourish,” said Carolyn Fairbairn, CBI’s director-general.
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“As UK companies grow, they also create jobs and drive prosperity here at home. So, as new opportunities spring up in India – from its rapid digitisation to more young people wanting to study at the UK’s world leading universities – our firms will be looking to take full advantage.
“Further reductions in India’s corporate tax rates and improvements to the ease of doing business will see the relationship between India and the UK go from strength to strength,” she added.
At the beginning of the month, Indian prime minister Narendra Modi announced the government would cut taxes for poorer Indians and small companies, while investing nearly $60bn in infrastructure.
It is likely that a UK-India bilateral trade deal will be agreed once article 50 is triggered and Britain formally exits the EU.