After the UK and India signed a long-awaited trade deal, industry leaders in both countries say the pact will revolutionise how talent and capital flows between them.
While the deal puts significant focus on cuts to levies on consumer goods such as whiskey and clothing — offering the UK economy a potential £4.8bn boost — members of the startup ecosystem have hailed the potential it could bring to tech, too.
Varun Rekhi, an investor at Speedinvest, tells Sifted the deal could even disrupt India’s longstanding talent pipeline to Silicon Valley.
“The UK-India Free Trade Agreement isn’t just about easing tariffs — it’s about enabling the flow of talent, capital and innovation between two increasingly connected tech ecosystems,” he says.
Climate tech, aerospace and life sciences
Areas of the tech ecosystem which could benefit from the new, lower tariffs include the life sciences sector — as fees on exporting medical devices will fall — as well as companies exporting aerospace and automotive goods to India.
Under the terms of the deal, Britain’s climate companies will gain better access to India’s procurement market as it transitions towards renewables.
“The UK’s cleantech sector is poised to benefit significantly,” says Jai Mallick, managing director of Intralink in India, which helps UK companies to expand to international markets.
“Innovative battery and storage technologies could be a particularly exciting area of collaboration, as India’s energy transition progresses at pace.”
Startups working on financial services could also benefit, says Kaushik Subramanian, partner at EQT Ventures.
“UK financial services will be treated at par in India — this will lead to increased collaboration and trade on both sides and also potentially opens up an entirely new market to several firms operating in these areas.”
An India-UK corridor
Beyond exports, the British government says the deal will make it easier for companies to move professional employees from India to the UK under short-term transfers. It lowers national insurance contributions UK firms need to make for Indian workers.
“Easier access to India’s deep pools of highly skilled technical talent, including folks graduating from some of the most highly regarded technology institutes (e.g. the IIT Universities), will be a welcome boost to UK companies,” says Ashish Patel, a managing director at investment bank Houlihan Lokey, which helps startups secure funding.
A significant amount of Indian tech talent has typically headed to Silicon Valley, but Speedinvest’s Rekhi says the deal could disrupt that.
“The agreement could establish the UK-India corridor as a credible counterweight to the long-dominant India–Silicon Valley axis,” Speedinvest’s Rekhi says.
Subramanian agrees. “The national insurance contribution relaxation for short term workers will make the UK more attractive to highly qualified tech workers who today gravitate to the bay area because of the large comp difference.”
UK startups with Indian operations
Notable UK startups with links to India include London-headquartered fintech Tide, which has operations in Hyderabad and offers services to customers across the country.
Fellow UK fintech Revolut is preparing to launch its services in India this year, after receiving in-principle approval from the country’s central bank to issue prepaid cards and wallets in 2024.
British food delivery startup Deliveroo also has an operations hub in India, running its engineering team out of Hyderabad.
The trade deal could now see more UK startups targeting customers in India.
“Given the strength of both countries in technology and services, opportunities will open up for British firms to offer fintech, edtech, and professional services in India without requiring a physical presence,” says Philip Salter, founder of startup lobby group the Entrepreneurs Network.
“Critically, UK entrepreneurs will benefit from being among the first foreign entrants in newly liberalised Indian sectors, giving them an edge over competitors in countries without a deal.”
Read the orginal article: https://sifted.eu/articles/uk-india-trade-deal-to-disrupt-silicon-valley-talent-pipeline/
