LONDON: A survey of 106 UK organisations operating in India, spanning manufacturing, services, and higher education sectors, has said that a majority of them are finding it easier to do business in India.
The ‘Doing Business in India Report 2020’ by the UK India Business Council (UKIBC), formally launched by UK Investment Minister Lord Gerry Grimstone during a virtual meeting on Thursday, found that 66 per cent of the surveyed UK businesses said they believe it is getting easier to do business in India as a result of “progressive reforms” and improvements in components of India’s business environment, such as the availability of support and service providers, skilled labour, and supply chain.
“In spite of new challenges to business such as Brexit, COVID-19, and the global economic slowdown, UK companies not only remain deeply committed to India, but many are optimistic of expanding their business footprint in India,” said UKIBC Group CEO Jayant Krishna.
The survey also finds that the Atmanirbhar Bharat mission is seen by the UK firms as an opportunity to do more business in India by leveraging UK’s innovation for manufacturing in India, with more than three-quarters (77 per cent) of respondents positive about the Indian government’s flagship self-reliance mission.
This report comes as the UK and India committed to an Enhanced Trade Partnership at the recent India-UK Joint Economic and Trade Committee (JETCO) meeting between Commerce and Industry Minister Piyush Goyal and his UK counterpart, Liz Truss.
While a free trade agreement (FTA) remains an eventual goal, the immediate priority has been identified as removing market access barriers and making it easier for companies to operate in each other’s markets.
“The positively-balanced findings of this report are tremendously encouraging.
There is much still to do to remove the persistent barriers to doing business in India, particularly improvement to bureaucratic procedures and the application of the tax regime, which is a persistent concern for businesses in India.
Yet, the optimism and commitment amongst UK businesses is telling of the strength of the UK-India relationship and scope for growth, said UKIBC Chair Richard Heald.
The most frequently selected obstacle to doing business in India in the report is flagged as legal and regulatory barriers, with just over half of all respondents selecting it in their top five.
However, there has been a noticeable fall from a selection rate of 66 per cent of respondents in 2018 to 51 per cent in 2020.
The most pressing regulatory impediments highlighted are foreign exchange regulations, goods and services tax (GST), import tariffs, alignment with international standards and incorporation of company.
Taxation issues, corruption, and finding a suitable partner complete the list of concerns.
The report finds: “UK investors expect the certainty of a stable tax regime. UK businesses tend not to anticipate that key rules of the game would be changed drastically after their investments have been made.
“From 2012 onwards, the policy of retrospective taxation has been a dampener in the inflow of foreign capital from the UK and elsewhere into India.
Its redressal would remove a significant barrier to do business.”
The survey suggests that improving bureaucratic processes with greater accountability, increasing regulatory certainty, simplification of the GST processes, improving the quality of infrastructure and making single window clearance effective were the most sought-after reforms by UK businesses, in that order.
For the third year running, Maharashtra came out as the state with maximum incremental improvement, followed by Karnataka, Delhi, Gujarat, and Tamil Nadu, in that order.
Next in sequence were Uttar Pradesh, Telangana, Andhra Pradesh, Chandigarh and Haryana to complete the top 10 in the UKIBC’s sixth annual report on ‘Doing Business in India: The UK Prespective’.
Recent Random Post:
