The jurisdictions investing into the UK
The United States of America
Given the scale of US investment into the UK – which is the leading European destination for American inward investment – the ‘Economic Prosperity Deal’ announced in May 2025 between the two countries has significant implications for FDI.
The agreement avoids the worst of the new American tariffs, with most products subject only to the baseline 10% rate, while key sectors such as steel, agriculture, aerospace, and automobiles benefit from a reduction in barriers. This is favourable when compared with a 15% rate for the EU and 50% rate for India, and likely means that the US will continue to be a strong source of inward investment into the UK.
In September 2025, the UK-US relationship reached a further milestone with the signing of the Tech Prosperity Deal during President Trump’s UK visit. This promises £150bn worth of US investment, with the potential to create 7,600 new jobs. It will see the two nations collaborate on key areas, including nuclear energy, quantum computing and AI in particular – a economic priority for the UK government.
India
Following the US, India was the second largest source of UK inward investment in 2024/25. The trade agreement signed between the two countries in July 2025 suggests promise, especially given India’s long-standing policy of placing comparatively high tariffs on imports to protect domestic industries. Both countries have agreed to reduce tariffs on at least 90% of products, and the cuts taking place are significant – with India’s average tariff on UK products going from 15% to 3%.
By allowing closer supply chain integration, Britain’s position as the leading recipient of Indian investment in Europe will be reinforced. At the same time, recent US tariffs on Indian exports may further strengthen the UK’s attractiveness as an investment destination for Indian firms seeking stable market access.
Canada and Australia
In contrast, the UK’s prior free trade agreements with Canada and Australia – in effect since April 2021 and May 2023, respectively – have had only modest impacts on inward investment into the UK. Both agreements mostly reinforced pre-existing trade openness and haven’t produced a sustained uplift in project numbers or job creation.
On a sectoral basis, investment from both countries has remained concentrated in finance, IT and technology, construction, and professional and business services, all of which represent the UK’s niche.
But EY data reveals a mixed overall picture: the UK attracted 59% of Australian FDI projects in Europe in 2024 – above its five-year average – but only 18% of Canadian projects the same year, down from an average of 24%.
Amid a more fragmented global landscape, these agreements could improve the UK’s relative standing compared to the rest of the world, potentially positioning the UK as a more attractive destination for inward investment.