UK-India Business Growth has witnessed an impressive surge in 2024, as the latest data from HSBC UK reveals a remarkable 121% rise in the value of payments received by UK businesses from India. This growth is part of a broader trend that shows not just strong but accelerating business ties between the two nations. The data underscores a thriving and evolving economic corridor, which is creating numerous opportunities for both countries.

In the first nine months of 2024, HSBC UK has reported that the value of payments made by UK businesses to India grew by 32%. This is a substantial increase that reflects the ongoing strengthening of bilateral trade. The rise in business activity is further highlighted by the fact that HSBC UK received 36% more new business client referrals from HSBC India when compared to the same period last year.

Cora McLaren, Head of International Subsidiary Banking at HSBC UK, expressed optimism about the growth trajectory of UK-India business relations. She explained that India, with its vast population and growing middle class, presents significant opportunities for UK businesses. These businesses can tap into India's expanding consumer market and sell high-quality products and services. Additionally, McLaren pointed out that India is increasingly becoming a hub for Global Capability Centres (GCCs). These centres host strategic functions for multinational corporations, thanks to India's technological expertise and strong English-language proficiency.

The UK-India trade relationship is not one-sided. Indian businesses are also doing increasingly well in the UK, particularly those in the pharmaceutical sector. India is a global leader in pharmaceuticals, and many Indian firms are establishing a strong presence in the UK. HSBC UK’s data illustrates this growing two-way relationship, with increasing business activity on both sides of the border.

HSBC, a long-established player in the UK-India business landscape with over 100 years of experience, is proud of its role in facilitating the expansion of UK businesses in India. At the same time, the bank is equally committed to supporting Indian firms seeking to establish themselves in the UK. This partnership is an important example of how businesses in both nations are leveraging each other’s strengths to grow and prosper.

The positive business climate between the UK and India is further boosted by the upcoming Free Trade Agreement (FTA) negotiations. These talks are set to resume in early 2025, following an agreement between UK Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi at the G20 Summit in Brazil. The FTA, which has been in negotiation since January 2022, promises to enhance trade and business opportunities significantly.

Richard McCallum, the Group CEO of the UK India Business Council (UKIBC), also welcomed the renewed commitment to restart the FTA talks. He highlighted that the growing trade between the two countries, as evidenced by HSBC’s data, will accelerate even further once the FTA is in place. McCallum also emphasized that India is becoming an increasingly attractive investment destination due to sustained business reforms and favorable geopolitical factors.

India’s rising position as a global economic powerhouse, combined with its large consumer market and skilled workforce, makes it an important strategic partner for the UK. The ongoing reforms and the FTA will only make India more appealing for UK businesses, offering a wide range of opportunities across various sectors.

As of the latest available data, the total trade between the UK and India reached GBP 42 billion in the four quarters leading up to the end of 2024. This marks a significant achievement in the trade relationship between the two nations. With the FTA talks set to resume and a clear timeline yet to be officially confirmed, expectations are high for the positive impact the agreement will have on bilateral trade and investment.

The FTA will likely lead to reduced trade barriers, improved market access, and greater economic cooperation between the UK and India. For UK businesses, it will open new doors to one of the world’s fastest-growing major economies. For Indian businesses, it will provide better access to the UK market, which is one of Europe’s largest and most developed.

HSBC’s support for both UK and Indian businesses has played a significant role in facilitating this growth. The bank’s global presence and expertise have allowed it to serve as a bridge for businesses looking to expand across borders. HSBC UK’s focus on India as a key market highlights the immense potential for UK businesses in this rapidly developing economy.

India’s expanding middle class is one of the key drivers behind the rising trade volumes. As more people in India enter the middle class, they are increasingly demanding high-quality goods and services. UK businesses, known for their premium products, are well-positioned to meet these demands. Moreover, India’s growing economy offers opportunities for collaboration in technology, healthcare, finance, and many other sectors.

India’s role as a hub for Global Capability Centres is another key factor driving business growth. As more multinational corporations look to India for its technological expertise and cost-effective solutions, the demand for skilled workers in fields like IT, data analytics, and engineering is rising. This is benefiting both Indian and UK businesses that are involved in these sectors.

As the UK and India look forward to the resumption of FTA negotiations, businesses on both sides are eager to capitalize on the opportunities that will arise from this strengthened trade relationship. The FTA has the potential to unlock new growth and collaboration, making it easier for businesses to navigate the complexities of international trade.

With the support of institutions like HSBC and the renewed commitment from both governments, the future of UK-India business relations looks exceptionally bright. The combination of strong trade growth, a growing middle class in India, and the strategic importance of both countries will continue to drive business success for years to come.