India, July 15 : India is increasingly being viewed as a major global investment destination, with international companies showing growing confidence in the country’s long-term economic potential, according to Harjinder Kang, the United Kingdom’s Trade Commissioner for South Asia.
Kang said that businesses across the world are closely evaluating opportunities in India by comparing potential returns with associated risks. He noted that the country’s expanding economy, rising consumer demand and improving business environment are making it an attractive market for global investors.
Speaking to ANI on Wednesday, as the India-UK Comprehensive Economic and Trade Agreement (CETA) officially came into effect, Kang highlighted that a proposed UK-India investment treaty could further strengthen investor confidence and create a more secure environment for companies looking to establish long-term operations in both countries.
“People are making their judgments on India based on return on risk. It’s a huge growth opportunity,” Kang said, explaining that companies typically assess both growth prospects and investment protection before committing significant capital.
Investment Agreement Seen as Key Step to Boost Business Confidence
The proposed Bilateral Investment Treaty (BIT) between India and the UK is expected to play an important role in enhancing investor protection and encouraging greater foreign direct investment (FDI).
According to Kang, both countries had initially planned to complete the investment treaty alongside the free trade agreement. The proposed pact was designed to offer additional safeguards to businesses, ensuring greater legal certainty and protection for investors.
“What we were hoping for was to do in parallel with the FTA was a Bilateral Investment Treaty… that would have provided some degree of protection for future investments,” Kang said.
British businesses had strongly advocated for an investment protection framework during consultations before the trade negotiations began. Companies expressed the need for stronger assurances regarding long-term investments, dispute resolution mechanisms and regulatory stability.
Although the investment treaty was not finalised along with the trade agreement, Kang said discussions between the two governments are continuing. He added that both sides recognise the importance of such an agreement in expanding economic cooperation.
The UK Trade Commissioner said that a stronger investment protection mechanism could encourage companies that remain cautious about entering new markets.
“It will make a big difference that companies that have a little bit of reservation might then be feeling a bit more secure,” he said.
India-UK Trade Deal Opens New Economic Opportunities
The India-UK Comprehensive Economic and Trade Agreement officially came into force on July 15, marking a significant milestone in bilateral economic relations.
The agreement provides duty-free access for nearly 90.2 per cent of Indian exports entering the UK market while reducing tariffs on several British products entering India.
The trade pact is expected to benefit sectors such as textiles, engineering goods, pharmaceuticals, food products and manufacturing by improving market access and reducing trade barriers.
However, Kang emphasised that the agreement should not be viewed only as a trade arrangement. According to him, it represents the foundation of a broader partnership covering investment, technology, defence cooperation, education and climate-related initiatives.
British Companies Expanding Presence in India
Kang highlighted that India has already become an important investment destination for several UK-based companies.
He pointed to the example of a leading British healthcare company that recently established a manufacturing facility in Madhya Pradesh after identifying India’s long-term growth potential.
According to Kang, global companies are increasingly looking beyond short-term market conditions and focusing on India’s future economic trajectory.
He said the country’s large consumer base, skilled workforce and expanding industrial capabilities are among the major factors attracting international businesses.
Indian Investments in the UK Continue to Rise
The investment relationship between India and the UK has also grown significantly in recent years, with Indian companies expanding their footprint in the British market.
Kang said around 1,000 Indian companies have invested in the UK over the past four to five years, making India the second-largest source of investment projects in the country after the United States.
These investments span multiple sectors, including technology, manufacturing, healthcare, renewable energy and financial services.
He noted that the economic relationship between the two nations is becoming increasingly balanced, with businesses from both countries benefiting from new opportunities.
Investment Treaty Could Strengthen Future Economic Partnership
Experts believe that a comprehensive investment protection framework could further deepen India-UK economic ties by encouraging more companies to invest across borders.
A stable investment environment, transparent regulations and stronger dispute resolution mechanisms are considered important factors for attracting global capital.
Kang said the implementation of the trade agreement marks the beginning of a new phase in bilateral cooperation, where investment and innovation will play a central role.
He added that future collaboration between India and the UK is expected to expand beyond trade into areas such as advanced technology, defence manufacturing, clean energy and education.
Conclusion
India’s growing economic strength and expanding market opportunities continue to attract interest from global investors. The proposed UK-India investment treaty could provide additional confidence to businesses by offering stronger protections and greater certainty.
As the India-UK trade agreement enters into force, both nations are looking to build a deeper economic partnership driven by investment, technology and long-term cooperation. The next phase of bilateral relations is expected to focus on creating a more secure and attractive environment for companies from both countries.