Ease of Doing Business: UK investors call for continued reforms alongside FTA in UKIBC report
The UK India Business Council launched its 7th Annual Doing Business in India Report on Wednesday 15th December.
The report was produced from a survey of 147 UK business representatives, who shared their experiences of India’s business environment and made constructive recommendations to make India even more attractive for international investors. The findings of which show that UK companies remain committed to operate, assemble, manufacture and trade with India; that they are keen to continue to support in India’s development and global ambitions; and a majority (51%) assert that the business environment is improving.
Businesses have also made clear that, while they are positive about the forthcoming FTA negotiations, they are clear that they also value a sustained effort to improve the ease of doing business.
The report also uncovers that UK businesses remain overwhelmingly of the belief that Atmanirbhar Bharat, or the ‘self-reliant India’ mission, is an ‘opportunity to do more business with India’. There was, however, a slight drop in positivity for Atmanirbhar Bharat since last year with 65 percent viewing the opportunity for bilateral economic activity positively in 2021 versus 77 percent in 2020. This is a timely reminder that businesses need ongoing reassurance and evidence that India is open to international trade and integrating with global supply chains. The imminent FTA negotiations between the Indian and UK Governments present a critical opportunity to these ends.
To take UK-India investment to the next level, businesses would like to see ‘improving bureaucratic processes with accountability’ made a reform priority by the Government of India, with more than 50 percent of all respondents having named this as their priority area of focus to facilitate increased economic activity. ‘Increasing regulatory certainty’ was the second most popular reform, followed by ‘simplification of the GST processes’.
Upon the report’s launch, UKIBC Executive Chair Richard Heald said: “The UK India Business Council believes that an active and open dialogue between businesses and Government is critical to a successful and dynamic business environment. As those with experience on the ground, businesses are best placed to share feedback and we sincerely welcome the Government of India’s responsiveness and willingness to engage with businesses on that feedback at various meetings with the UKIBC in recent weeks.
It may be presumed that many of the issues raised under an “Ease of Doing Business” survey are separate from the Free Trade Agreement process currently underway between the UK and Indian Governments. We would disagree. Indeed, the strong message received by UKIBC during the FTA consultancy period is that the emphasis on Ease of Doing Business should not be reduced as both Governments become focussed on the FTA process. Rather, Ease of Doing Business and the Free Trade Agreement are integrally linked, reflecting operational improvements which can be affected in both the UK and in India to facilitate bilateral trade and investment”.
UKIBC Managing Director Kevin McCole said: “UK businesses are significant FDI investors in India, employing hundreds of thousands of staff across every State, making and innovating in India, exporting from India, and contributing hugely to the achievement of the Sustainable Development Goals. Therefore, the operating environment – policies and their implementation – really matter to these companies. Our annual survey is always much anticipated as it is an invaluable barometer of the ease of doing business in India. Once again, respondents are positive overall. But, like governments all across India, businesses want ongoing improvements and are working well with State and Union Government officials to secure them.”
Trade and investment priorities were front and centre when the Indian and UK Prime Ministers announced a “transformational” Comprehensive Strategic Partnership (CSR) on 4 May 2021. The CSR includes most notably a UK-India Enhanced Trade Partnership and commitments to double trade by 2030 and move forward with Free Trade Agreement negotiations.
You can download the report via the UKIBC website here.