Navigating the new era: Capturing opportunities in the UK-India business corridor

Despite their long history, fully realizing potential UK-India business synergies has fallen short. At a recent gathering in London, prominent business leaders from both countries shared candid thoughts on how to leverage each nation’s complementary strengths to unlock further economic opportunities. This article is the second in a two-part series on “India’s business corridors”.

Businesses across the world are tackling new challenges thrown up by geopolitical currents – and thinking hard about how to capture the new opportunities such seismic shifts create. Asia’s robust economic growth and its position as the world’s manufacturing and trade hub give it a critical global role. The region accounts for more than 50 percent of the value of global trade , and it contributed 42 percent of world GDP, more than any other region, in 2021.

It is against this backdrop that I’ve been meeting business leaders eager to nurture stronger partnerships in key business corridors with, and within, Asia. In the heart of London's South Kensington, we recently convened a group of executives to discuss the state of the UK-India business corridor. It was a lively discussion where leaders from different sectors – from tech to consumer – shared candid thoughts on the UK’s role in an ever-evolving global economy, and how Indian and British corporates could be more proactive partners. As we stand on the cusp of a new era , C-suite executives are rightly reevaluating their stakes in these regions.

Taking stock of unrealized potential

The general sentiment in the room was clear: The geopolitical landscape is shifting and, with it, a new impetus for UK and Indian enterprises to forge stronger alliances. A fluid business backdrop in both countries only underscores the urgency to capitalize on this relationship.

India presents enormous opportunities. To highlight just a few, as a growing global manufacturing partner, India’s export of goods is projected to reach $1Tn by 2030. As for its consumer market, India’s share of middle-income households is set to increase three-fold by 2030 and its digital economy is growing 2.4x faster than GDP. India’s workforce, meanwhile, is young and abundant: the country is projected to constitute 20 percent of the world’s working population by 2045. Yet, India grapples with sustaining its rapid economic expansion. Ten million people join India’s workforce annually; continuous job creation and encouragement of private sector investment, which has lagged public investment, are thus vital for continued growth.

Meanwhile, the UK continues to have enduring strengths. The UK leads Europe in venture capital tech funding, it has the second largest commercial market for visual arts, and is open to the world – since 2005, some 85 percent of revenue growth for FTSE350 corporates came from international markets. Still, like other advanced economies, the UK faces a productivity conundrum not least due to talent; after the US, the UK faces one of the largest tech talent gaps at 30-32 percent.

Hence the UK and India are well positioned to complement each other’s strengths. While the UK leads the world on art, science, and culture, India offers the talent, market, and the skill base.

Identifying areas of complementarity

Leveraging the relative strengths of the UK and India remains below what one would expect given the countries’ long history. To realize corporate ambitions, businesses on both sides will need to form new partnerships in areas of mutual interest – be it unearthing hotspots for investment, building innovation ecosystems, or shaping the right talent mix amid a new wave of outsourcing. One participant noted how his company has coupled the design capability of the UK with the engineering talent of India to produce the latest lineup of electric SUVs, now sold all over the world. It is just one example of how to bring the best of the UK and India together.

A common thread between most of the companies represented was that they were either looking at or have already set up Global Capability Centers (GCCs). These large facilities concentrate workers and infrastructure that handle operations and IT support to sustain productivity growth. More than 20 percent of Fortune 500 companies already have a GCC presence in India . Multinationals such as SAP have 40 percent of their R&D workforce in India, while JP Morgan had over 40,000 people in Bengaluru, Mumbai, and Hyderabad as of 2022. Some companies also use GCCs as a center of excellence for automation, innovation, and analytics, among other tasks. This is particularly relevant for the UK, given its significant talent and skill gaps.

Addressing perception gaps to strengthen collaboration

There is no dearth of opportunity. Set to overtake Japan and Germany as the third largest global economy by 2030, India’s ambitious infrastructure plan includes spending $1.8Tn across four big priorities: multi-modal integration, ports, a dedicated freight corridor, and roads and highways. India already expanded infrastructure by 50 percent in the last decade, building twice the number of airports in that time frame.

Still, participants lamented that the transformative changes within India over the past two decades remain underappreciated by UK corporates. This gap in perception underscores the need for enhanced communication and narrative-sharing about India's advancements. Additionally, the potential for trilateral cooperation among the UK, India, and other Asian countries was discussed, which could pave the way for a more integrated approach in tackling global challenges and seizing business opportunities.

As our distinguished group of executives observed, there are substantial opportunities for business leaders in the UK and India to facilitate and capitalize on the UK-India corridor. What is clear is that continued dialogue will help identify and mitigate the decelerators to get the UK-India corridor moving.