UK companies look to India to stay profitable: survey

Nearly 60 per cent of the 540 senior executives from 19 business sectors questioned in the Government-commissioned survey said that they expected to reach this level by 2014, almost doubling the 31 per cent who say they have already done so.

Almost 77 per cent of the companies questioned said they expect the prospects for the world economy to improve during 2010-11, with emerging markets providing support for global profitability.

The survey, commissioned by UK Trade and Investment, was released as Business Secretary Lord Mandelson asked UK firms to step up their efforts to seek out opportunities in the emerging markets.

Lord Mandelson is scheduled to address the Economist Emerging Markets Summit in London. According to him, UK companies should be strategic about their exports and plan for the long term. "Many emerging markets are outperforming developed economies, and are expected to grow strongly for years to come. This represents an exciting opportunity for UK business providing greater diversity for the exporter," he said.

The report, entitled Survive and Prosper, notes that emerging economies outperformed those of recession-hit developed countries in 2009. China was cited as the preferred investment destination over the next year by 45 per cent of business people questioned, followed closely by India (43 per cent) and other Asian nations (35 per cent).

But half of respondents said that political risks - including the dangers of nationalisation and expropriation - were the main obstacle to doing business in these new markets. Lord Mandelson said: "The global recession was a wake-up call for companies to diversify their export base and seek out new opportunities in the emerging world. UK business needs to adapt its strategy accordingly to reap long-term rewards."