June 18, 2006
Reverse flow: Indian firms get bullish on Britain
In a reversal of the trend where British firms took operations to India, it
is the turn of Indian companies to set up shop in the UK, which receives 60
per cent of all Indian investment in Europe.
Over 430 Indian firms based in London account for 30 per cent of all foreign
investment in the capital and more are queuing up, said a report in The
Telegraph, ahead of the release of official figures for the current
financial year in this regard.
UK Trade and Investment, the government-backed agency which encourages
overseas companies to do business in Britain will reveal next month the
number of Indian companies that have invested here in the year, up to April.
Last year, the number of Indian companies which launched UK operations grew
by 23 per cent and there was no sign that this growth had slowed, the report
The growth rate is expected to be Himalayan, it said, adding that for the
first time, the amount of money invested in the new UK developments by
Indian companies up to March last year overtook the amount invested in India
by British companies.
“There is much interest in the UK from Indian firms,” the daily quoted Anuj
Chandem, international business partner at Grant Thornton as saying.
Nicolas Piramal last week announced it was buying a manufacturing plant from
Pfizer, the drug giant in Northumberland. Tirupur Exporters’ Association
(TEA), Tamil Nadu, will open a warehouse at Felixstowe, a joint venture with
St John Freight Systems and the Indian company to supply clothing to
Mothercare and GAP.
The growth in near-shoring has been equally robust. Indian companies are now
employing British nationals in call centres based in the UK to do the same
ICICI One-Source, a Mumbai-based outsourcing company, last week announced it
would build a 1,000-people call centre in Belfast, its first in the UK.
HCL Technologies has acquired a call centre in the area. “As we broaden our
services, some components of what they want are more suitable to be done
locally. A lot can still be done offshore but there are some things that are
better kept closer to home,” Matthew Vallance, ICICI’s Managing Director for
Call centre activity in the UK is growing by 5.5 per cent a year and is
expected to employ more than one million people by 2007.
Phiroz Vandrevala, executive vice-president, Tata Consultancy Services, the
first IT company set up here in 1975, said English language provided a
common thread between the two nations. TCS recently formed a subsidiary in
Peterborough to provide call centre service for Pearl, the closed-fund life
Grant Thornton’s Chande was quoted as saying that the large Indian community
in the UK has acted as a spur to investment.
“There is a significant Asian community in the UK and a lot of Indian
companies have links in terms of relations to business contacts. Many
Indians find it more comfortable to deal with the UK. There is cultural
empathy,” he added.
a Bangalore-based healthcare technology group that employs 215 people opened
an office in Cambridge in 2004.
vice-president, corporate development, said although the UK office employed
only three people, deals generated in Cambridge accounted for 35 per cent of
the company’s entire revenue last year. “It works pretty well,” he added.
Paul Witeway of UK Tade and Investment said there were broad economic
reasons for the Indian influx. “We have a stable economic framework,
flexible labour laws and a skilled labour force.”
UK Trade and Investment is working overtime. Not only does it have teams in
New Delhi, Mumbai, Bangalore and Kolkata, its website lists the benefits of
doing business in the UK. Whiteway said 19 Indian companies were listed on
the London Stock Exchange, more than on the New York Stock Exchange and