India-UK ink pacts on sustainable finance

Our Bureau New Delhi | Updated on October 28, 2020

Finance Minister Nirmala Sitharaman participating in the 10th India-UK Economic and Financial Dialogue   -  -

Finance Minister Nirmala Sitharaman and UK Chancellor Sunak co-chair the meet

India and the UK on Wednesday reached landmark agreements on financial services, infrastructure and sustainable finance, helping to boost jobs and investments in both countries.

These agreements came at the 10th Economic and Financial Dialogue (EFD) between the UK and India, jointly chaired by Finance Minister Nirmala Sitharaman and the UK Chancellor Rishi Sunak.

The agreements include a new strategic partnership to accelerate the development of Gujarat International Finance Tec (GIFT) City as an international financial centre, including regulatory capacity building support for the new International Financial Services Centre Authority. A new UK-India Partnership on Infrastructure Policy and Financing to support the Indian National Infrastructure Pipeline with UK commercial expertise and financing was also signed.

Green investment

Both sides agreed to strengthen cooperation on mobilising private capital into green investment, including through a new UK-India Sustainable Finance Forum and greening the financial system.

Besides providing a fresh mandate for the industry-led India-UK Financial Partnership to explore closer financial ties in areas including fintech, both sides agreed to create a new Financial Markets Dialogue to remove regulatory and market access barriers for UK and Indian firms.

The Chancellor and Finance Minister discussed the importance of cooperation in dealing with the economic impact of Covid-19 – which the UK and India are already leading as co-authors of the G20 Action Plan – and tackling climate change through sustainable finance.

Rishi Sunak said: “The UK’s economic and financial relationship with India has never been more important with the global challenges we face. Today we set out our ambition for even stronger ties, with an agreement that will increase investment and secure jobs. We are also committed to working together to lead the global economic recovery as we build back better after the pandemic.”

The Chancellor championed UK markets as a source for Indian companies to raise international capital, and welcomed the decision to allow Indian companies to directly list on the London Stock Exchange – the UK being one of only seven jurisdictions permitted.

Increase in FDI limit

Ministers also agreed to explore ways to boost investment in insurance through an increase in India’s foreign investment limit, an official release issued by the British High Commission after the EFD said.

Sitharaman said that UK-India Fast Track Start-up Fund backed by SIDBI and the UK Government will fund early-stage tech start-ups with technical assistance focussed on capacity building, policy advocacy and deepening entrepreneurial connection with the UK.

Ministers committed to leading the world’s economic recovery by working closely together through the UK’s G7 and COP Presidencies and India’s G20 Presidency in 2022.

Alongside the EFD, the Chancellor addressed industry leaders at the UK-India Investing for Growth Forum hosted virtually by the City of London Corporation and the Federation of Indian Chambers of Commerce and Industry. The Chancellor highlighted the enormous potential for the UK and India to work together to drive green sustainable finance flows and generate even stronger bilateral investment.

Published on October 28, 2020

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