UK-based companies are positive about doing more business with India following its exit from EU and believe that Maharashtra is the best state to do business followed by Delhi, according to a report brought out by the UK India Business Council (UKIBC).
“With Brexit on the agenda of UK companies, 26 per cent said they planned to do more business with India as a direct result of the UK leaving the EU. This will be a further boost to the flow of goods, services and investment between the two countries,” the UKIBC’s fifth annual `Doing Business in India Report’ stated.
The report is based on discussions, including a round-table in London with Union Commerce Minister Piyush Goyal, and a survey that captured the views of UK companies and higher education institutions on the operating environment in India and their reform priorities. Overall, the survey respondents were positive about India, with 56 per cent stating that it is getting easier to do business in India, and only 21 per cent saying that it has not improved. About 23 per cent respondents were undecided on the matter.
For the first time, the UKIBC asked for views on how India’s states and Union Territories were performing on the ease of doing business. “Maharashtra was the clear winner, with 36.67 per cent of respondents giving it the honour, followed by Delhi, which captured 20 per cent of the vote,” the report said.
The most persistent barrier to doing business continued to be ‘legal and regulatory impediments’ cited by 59 per cent of the respondents. This was followed by identification of a suitable partner and taxation issues. The number of respondents that identified corruption as the top impediment declined to 17.5 per cent in the 2019 report, compared to over 50 per cent in 2014, the release stated.
The most popular reform among UK businesses was ‘improving the quality of bureaucracy’, with 28.6 per cent respondents urging the government to act in this area. The second area for improvement was simplification of the Goods and Services Tax, although the number of respondents calling for it declined to 16.9 per cent from 24 per cent in 2018. This reflects that companies are coming to grips with India’s new tax system, and India has improved its implementation since the original roll-out, the report stated.
The highest scoring aspects of the Indian business environment continue to be tele-communication facilities, followed by the availability of skilled labour, availability of support and service providers, and the availability of a supply chain.
“The findings of this report reflect the long-term advantages of the huge and growing Indian market. There have been improvements, particularly in tackling corruption, but there is clearly much still to do to remove the persistent barriers to doing business, particularly when it comes to improving bureaucratic procedures and the application of the tax regime, which is a persistent concern for the UK and, indeed, all businesses in India,” according to Richard Heald, Chief Executive, UKIBC.
