The UK boosted its position as the largest foreign investor in India among the G20 group of the richest nations, according to a new report, as the government looks to boost trade ties with the largest Commonwealth nation.
Investment increased by $1.87bn (£1.5bn) over the course of 2016, according to a report by the Confederation of British Industry (CBI) and PwC.
From the turn of the millennium until the end of 2016 the UK invested over $24bn (£19.3bn) in India, with the chemicals sector receiving the bulk of capital.
A quarter of British direct investment went to the chemicals industry, with pharmaceuticals the next most popular industry, with 17 per cent of British spending.
While India is currently only the 18th biggest export destination for the UK, according to the Office for National Statistics, its 1.3bn consumers are seen as a vital market for the UK as it looks to pursue trade deals beyond Europe after it leaves the EU.
UK foreign secretary Boris Johnson last month visited New Delhi and Kolkata to meet Indian Prime Minister Narendra Modi.
While the report finds British investment supports 788,000 jobs in India, figures quoted by Johnson at the time of his visit to India also showed Indian firms creating 100,000 jobs in the UK.
Kevin Burrowes, head of clients and markets at PwC UK, said: “Building ever closer business ties with India will be critical, especially at this current time, given the changing global and European stage.”
India’s economy is rapidly growing, with a heady annual growth rate of 7.3 per cent, compared to the average amongst more developed OECD nations of only 1.7 per cent in 2016.
India is set to overtake the UK in GDP terms next year, according to analysis by the Centre for Economics and Business Research.
Carolyn Fairbairn, CBI director-general, said: “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."
She added: “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.”