A COUNTY MP has highlighted how UK companies are falling behind in the race to invest in India's fast growing economy.

A report by the Trade and Industry committee, of which Mid-Worcestershire MP Peter Luff is chairman, has concluded that our relationship with India should be generating a higher level of trade and investment.

MPs found that UK firms have only a partial understanding of Indian economy, despite it

being the fourth largest in the world, and having the second largest population.

Mr Luff said: "Levels of interest in the Indian economy are growing year upon year - but UK investors don't yet really understand the opportunities that India presents.

"If we are to take full advantage of this golden opportunity, UK firms must reassess their perception of the Indian economy as simply a source of low-cost labour and the UK Government must do more

to help them."

The report highlights how many companies view India as a source of low-cost labour, rather than as an emerging market in its own right.

MPs are concerned that the UK's perception is distorted by sections of the media which focuses on the perceived threat to jobs by outsourcing, particularly call centres.

They feel it creates a view that these centres are the dominant feature of the Indian economy.

The report explains that there are considerable openings for investment within the manufacturing and automotive and aerospace sectors, with vast opportunities for the UK's higher education sector.

The report encourages companies to become more vigilant if they are to take full advantage of India's fast liberalising economy.