Eyeing post-Brexit opportunities, Indian firms keen to set up shop in London

Even as the countdown for the Brexit transition has begun in the UK, trade and investment promotion agencies in the country are witnessing a surge in interest from Indian fintech, edtech and life sciences companies to set shop in London as they seek greater growth prospects and favourable business incentives when the UK leaves the customs union and single market.

“Despite the Covid-19 pandemic, we have 12 new companies registered in London from April till date. We have about 12 more companies, which are very close to setting up, between now and the end of the current financial year,” Hemin Bharucha, Chief Representative - India, London and Partners ,told BusinessLine.

London & Partners is the international trade, investment and promotion agency for London. It supports the London Mayor’s priorities by promoting London internationally in areas such as international business, leisure tourism, higher education and meetings and events sectors.

Bharucha also said that sectors such as edtech, fintech, life sciences, medical device companies and the creative industry, which witnessed phenomenal growth due to the pandemic, are showing lot of interest to start business in London to leverage the UK capital's strong technology prowess and venture funding to scale their business.

VC funding

“Suddenly, the edtech sector has become so big all over the world and the amount of funding that comes to the sector in London is phenomenal. So Indian companies come to London to access the venture capital (VC) funding,” Bharucha said, adding, “many of the Edtech's may do well as per Indian curriculum but when they want to grow globally, they also need access to ecosystem, which is available here (London).”

According to London and Partners, the UK capital has attracted $630 million in VC investment since 2014, which accounts for 62 per cent of all UK edtech investment. London is also home to Europe’s only edtech unicorn — Learning Technologies Group.

The economic ties between the UK and India has been growing strong over the last few years. Last year, India replaced Germany to become the second-largest source of FDI for the UK, after the US with 120 new projects and creating 5,429 jobs in 2019-20. London received the lion’s share of 59 of the total investment from India to the UK.

Tech majors

Nearly 900 Indian companies are operating in the UK including tech majors such as Infosys, TCS, Tech Mahindra, Wipro and HCL, besides ride-hailing platform Ola and Indian hotel chain OYO rooms. Of the total, 54 per cent Indian companies choose London as their location to set up their HQ.

With UK Prime Minister Boris Johnson remaining steadfast on the Brexit deadline of December 31 and his government’s growing appetite for greater economic collaboration with India, hopes are high to reach a free trade agreement after the Brexit transition period ends.

“Lot of these companies view Brexit as an opportunity. India will be given a lot of benefits and we will have a direct agreement between the UK and India, it will be very favourable for India and Indian companies,” Bharucha said.

He also added that South India is a strong market for London with businesses from Bengaluru, Hyderabad, Chennai and Visakhapatnam showing keen interest in setting up business in the city.