London: Despite an increase in bilateral trade, Britain's trade sector is losing its market share as Indian companies diversify their trading partners in Asia and Africa, says a new report.

Saudi Arabia, Iran, Nigeria, Kuwait, Iraq, Singapore and Malaysia have all displaced Britain in terms of market share, says the report by the Commonwealth Business Council and the UK India Business Council (UKIBC).

The India UK trade & Investment Flows 2008, to be published Wednesday, carries in-depth analyses of trade in services and investment flows through tax-efficient routes such as Mauritius.

UKIBC CEO Sharon Bamford said, �This is an important piece of work which will help policy makers and UK businesses by assisting them in making the right decisions with regards to trading with India.�

The report notes that Britain is seriously disadvantaged in a number of sectors such as banking, insurance, legal, accounting and retail where India, at best only partly allows foreign investment.

This affects the vast majority of Britain's industries and will require a serious effort by both industry and government to find ways to enter the Indian market, it says.