New Economic Strategy Set to Boost Productivity and Public Revenue
London has announced a groundbreaking 'Growth Plan' designed to generate an additional GBP 27 billion in tax revenue to fund essential public services, placing significant emphasis on India as its leading foreign direct investment (FDI) partner.
Mayor of London, Sadiq Khan, together with London's official growth agency, London & Partners, recently introduced the plan, aiming to boost productivity growth to an annual average of 2% over the next decade. This initiative seeks to expand London's economy by GBP 107 billion by 2035.
India Leads the Way as London's Largest Investor
India has emerged as London's fastest-growing source of FDI over the last two years, surpassing even the United States during the fiscal year 2022-23 and maintaining this top position into 2023-24.
Laura Citron, CEO of London & Partners, highlighted India's vital contribution, stating, “Foreign direct investment from India has been the fastest growing and has been our number one market for the last two years. It's Indian tech companies setting up operations in London. Post-Brexit, India has also rapidly expanded as a student market, becoming London's second-largest source of international students after China. Additionally, Indian tourism has shown robust growth, further reinforcing India's importance to London.”
Significant Rise in Indian Students in London
Official statistics for 2023-24 underline London's attractiveness to Indian students, with the city currently hosting 38,625 students from India. Over the past decade, India's share of London's international student population increased dramatically from less than 5% to over 20%.
Mark Hertlien, Head of Global Engagement at City St George's University and Chair of the International Network at London Higher, commented, “It's positive that London's Indian student population has significantly increased. At City St George's, the number of Indian students has doubled in recent years. These students become lifelong ambassadors, fostering strong and enduring connections between our two countries.”
London's Vibrant Tech Ecosystem Attracts Major Indian Companies
Highlighting London's appeal as a global innovation hub, Ashish Devalekar, Executive Vice President and Head of Europe at Indian IT giant Mphasis, underscored the city's thriving tech landscape.
“At Mphasis, we have steadily expanded our presence and plan to double our headcount through the London Innovation Hub, established last year,” said Devalekar. He further emphasized, “This centre is a testament to our commitment to the UK, serving as a hub for advanced solutions in AI, quantum computing, and other cutting-edge technologies.”
Comprehensive Approach to Reviving Productivity Growth
Developed collaboratively by London & Partners, businesses, trade unions, and local communities, London's Growth Plan outlines strategies to revitalize productivity, stagnant since the 2008 global financial crisis.
Key elements of the plan include:
- Developing world-class talent by equipping Londoners with essential skills for productive careers.
- Accelerating business innovation through new investments in technology.
- Implementing bold strategies to improve housing and infrastructure.
- Revitalizing London's local high streets to stimulate local economies.
Mayor Sadiq Khan stated, “This growth plan provides a golden opportunity to turbocharge growth and unlock London's full potential for all Londoners and the wider UK. It's a roadmap to create 150,000 quality jobs, build affordable homes, deliver significant transport improvements, and equip Londoners for the high-paying jobs of tomorrow. London's leadership in AI, life sciences, climate tech, and financial and creative industries positions us to thrive over the next decade.”
Enhanced Financial Stability for Low-Income Households
A central goal of the plan is to boost household weekly income by 20% for London's lowest-earning residents. This initiative could potentially provide over one million households with an extra GBP 50 per week, on average, after housing expenses, significantly enhancing living standards and economic security.
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