How will the UK–India investment corridor benefit from the newly announced Indian Budget?

India has announced its Budget for 2022-23, with an emphasis on facilitating and maintaining economic growth through boosting investments from the Venture Capital (VC) and Private Equity (PE) industry. Already one of the fastest growing economies in the world, India is home to one of the largest startup ecosystems in the world, and has a projected 9.2% GDP growth in FY2022 – according to the ministry of statistics and programme implementation. With a GDP of $3.1 trillion, India is the world’s sixth-largest economy and is is one of the leading start-up ecosystems in the world, having produced over 50 Unicorns in the last year – beating the likes of the UK.

Startups have played a significant role in the success of India’s economic growth, particularly through the sectors of FinTech, EdTech and HealthTech. To this extent, the Budget highlights the introduction of various factors that will assist in promoting and enriching India’s digital economy. This includes the introduction of the Central Bank Digital Currency (CBDC) by the Reserve Bank of India, as well as the proposal of a Digital University to provide students across the country with access to world-class quality and personalised universal education. In addition, it has been proposed that the country introduces a National Digital Health Ecosystem – consisting of digital registries of health providers and health facilities, unique health identity, and universal access to health facilities. This in turn will also provide various active opportunities for health-care startups.

The Indian Budget also calls attention to sunrise sectors – an industry that may still be in early stages but has the potential for a rapid boom. Artificial intelligence, geospatial systems and drones, space economy, genomic and pharmaceuticals, green energy, and clean mobility systems will be provided with full government support for research and development. With the rapid success of India’s startup ecosystem in the last few years, startups in these areas could be set to become the next Unicorn – or even better, the next Decacorn.

Alongside the Free Trade Agreement (FTA) currently in the works, India is fast becoming one of the leading destinations for investors in the UK. The UK–India trade and investment relationship is already worth over £24 billion and supports more than half a million jobs across the UK, providing great building blocks for the future. Having recently completed the first round of talks, the UK economy is set to benefit from a deal worth £50-100 billion.