A few months ago, British International Investment or BII (the UK’s development finance institution backed by the UK Government) invested in a new passenger electric vehicle venture to be launched by the Mahindra Group in India. The new business will develop four-wheel passenger electric vehicles for Indian consumers and other markets around the world. This initiative alone will contribute towards 2.1 million tonnes of C02 equivalent emission avoidance and lead to the creation of around 8,000 skilled jobs – a quarter of which is expected to be women. In 2019, an agreement to identify and pair businesses, investors, universities and other organisations in the UK and Indian tech sectors was signed. Adapting a model used for the UK-Israel Tech Hub, the two governments have partnered to encourage innovation and economic growth in both markets.

India and the UK have shared economic ties since the time of emperor Shah Jahan. It started with trade in commodities such as cotton and spices, but much has changed since then, and only for the better. Today, trade and investment corridors focus on technologies that present immense opportunity for both parties to become global trend setters.

Pre-pandemic levels of investment by the UK into India were higher than all forecasts and expectations. In 2019, the AT Kearney FDI Confidence Index ranked India as 16th most attractive FDI destination in the world. This was reflected by a massive increase in investments from the UK with the tally shooting up by 71 more deals than in the previous year, reflecting over $1.02B pumped into India, a 59% increase Y-o-Y.

It’s important to understand why all this money came flooding in. Since 2018, the Indian and British governments have launched several new partnerships to boost investments across the board. One such partnership was the ‘UK-India Tech Partnership Programme’ and its many subsidiaries, which also included the ‘Go Global Programme’ intended to support Indian start-ups looking to expand internationally. This scheme alone directly led to direct investments worth almost £40M into Indian start-ups focused on emerging technologies. But the ancillary and network effects of these direct investments were in the billions. Such collaborations are intended to put the UK at the forefront of the internationalisation strategy of future Indian start-ups, creating jobs and boosting economic growth.

The 2019 agreement between India and the UK outlined a robust pathway towards collective growth. This vision was further solidified by the UK-India Strategic Partnership Roadmap 2030 signed by the two countries in May 2021. This comprehensive Joint Statement doubles down on the importance of working together to unlock future potential. Specifically on investments, the roadmap aims to:

• “Build on the UK-India Development Capital Partnerships and strengthen two-way investments between UK and India, with the goal of investing into Indian start-ups, early-stage and green businesses and other innovative ventures and contributing towards sustainable development and the achievement of Global Goals by 2030.
• Boost entrepreneurial connections and exchanges to promote and strengthen closer cooperation, investment, mentorship and diaspora connects and sharing best practices.
• Continue to encourage the UK’s Development Finance Institution the CDC Group to work with India’s private sector in the sectors most important for inclusive and sustainable economic growth.
• Take forward the joint investment in the new UK-India Global Innovation Partnership.
• Identify priority areas for partnership and investment in existing and new areas of cooperation including, new and renewable energy, creative industries, advanced engineering, agri-tech, healthcare and life sciences including pharmaceuticals, infrastructure, metallurgy, automotive and agricultural engineering, defence, food processing industry etc.
• Encourage UK companies to invest in India’s manufacturing sector taking advantage of the Production Linked Incentive Scheme including in Electronics, Telecommunication equipment, automotive and pharmaceuticals manufacturing.
• Encourage Indian Companies to raise finance in the London market, including through listings and bond issuance, drawing on the success of the masala bond market”

There’s enough proof in the pudding – with US primary markets reaching saturation, India and the UK need to leverage their collective resources, intellectual property and skilled talent pools to forge the road for the next generation of technology companies. This means better access to Indian companies for UK-based investors and vice-versa. This also means re-thinking investment theses and strategies. Expansion for Indian start-ups no longer needs to be limited to APAC and for British start-ups no longer needs to be just Europe.

Geography and lines on a map shouldn’t define growth – synergy should. And just like that, we have two valence electrons waiting to combine and become one strong force for the world to beckon with.