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UK Secures Indian Investment Boost Amid Broader FDI Decline

Foreign direct investment in the UK fell 13% in 2024, but a new trade deal with India and pension fund commitments aim to reverse the trend.

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The UK remains one of Europe’s top investment destinations, but was not immune to the decline in foreign direct investment

Overview

  • The UK hosted 853 foreign direct investment (FDI) projects in 2024, a 13% decline from 2023, maintaining its position as Europe's second-largest FDI destination behind France.
  • Indian investment accounted for half of all Indian FDI into Europe, supported by a UK-India trade deal that reduced tariffs and introduced tax exemptions for Indian professionals.
  • US investment in the UK dropped by 7% in 2024, while overall European FDI fell 5% to a nine-year low of 5,383 projects.
  • The UK government has secured commitments from pension funds to invest tens of billions of pounds in domestic infrastructure to attract future FDI.
  • Key sectors for UK FDI in 2024 included technology, transport manufacturing, and aerospace, with projects like Infosys' AI lab in London highlighting continued interest in innovation.