India’s tech sector is booming and in recent years we’ve seen many of its fast-growing start-ups turn into multi-national companies. In fact, India is now home to over 107 unicorn companies, with many others tipped to join that club in the near future.
But where do these high growth companies look to expand overseas once they have outgrown the Indian market?
Silicon Valley and the United States is an obvious choice for some. However, if they are looking for somewhere a bit closer to home – London is an attractive option.
The UK and India have longstanding economic and cultural links.
From the established players like WiPro and Infosys to recent highflyers upGrad and Ola, London is already home to some of India’s most successful companies. According to recent research from Grant Thornton, there are over 900 Indian companies currently operating in the UK, employing over 141,000 people.
The Indian diaspora is also the largest ethnic minority group in London – providing lots of opportunities to enjoy Bollywood movies, Indian food and other cultural traditions throughout the year.
So why do Indian businesses continue to choose London as a top place to expand internationally?
Access to growth capital and tax incentives
While the world is experiencing a global slowdown in VC investment, the sheer number of VC firms and funds based in London means that growth capital is still available for those with bold new ideas.
London companies raised a record $28.1 billion last year – almost double the amount of any other European city. Unlike India where most of the venture capital is still focussed on smaller funding rounds – London is a place where companies can raise large funding rounds to accelerate their growth.
As one the world’s leading financial centres – London also provides other routes for raising funding such as the London Stock Exchange.
Indian companies can also benefit from the UK’s strong tax incentives such as the lowest corporation tax rate in the G7 and favourable R&D tax credits.
World class talent to choose from
London is a truly international city with a world class talent pool for Indian companies to choose from. It is home to four of the world’s top fifty universities, including the London School of Economics, Imperial College London and Kings College London. These institutions attract around 1 lac international students, giving Indian businesses access to extensive global talent to scale their operations to new heights. This includes many Indian graduates.
The UK government has also introduced the global tech talent visa, allowing companies to more easily recruit talent from all over the world. And recent changes to the graduate talent visa, means that graduates can stay for 2 years after graduating from a UK university. These policies enable Indian companies to establish and run satellite offices and subsidiaries of the parent company in the UK.
London provides a great launchpad into new markets and to reach new customers from across the world. Its favourable time zone allows companies to do business with Asia and North America all in one business day.
With direct flights to 326 destinations across the globe, London allows frequent travel for decision makers and employees. Its proximity to Europe provides easy access to the European market, as well as the 60m potential customers in the UK alone.
As London and Indian cities continue to grow their tech economies, there are lots of opportunities for companies to do business across both regions. As well as a healthy pipeline of Indian companies looking to London, we are also seeing a number of London tech businesses exploring expansion opportunities in Indian tech hubs such as Bengaluru and Mumbai.
So despite the global economic headwinds – the future is bright for the UK and India’s business relationship. We look forward to welcoming more Indian companies to make London their home in the months and years ahead.
(The author is Mr. Hemin Bharucha, Director of India, London & Partners (London’s business growth agency) and the views expressed in this article are his own)