UK Chancellor Rishi Sunak and India’s Finance Minister Nirmala Sitharaman have announced new initiatives to tackle climate change and boost investment between the nations at the 11th Economic and Financial Dialogue (EFD) held on Thursday.

These include a $1.2 billion package of public and private investment in green projects and renewable energy, and the joint launch of the Climate Finance Leadership Initiative (CFLI) India partnership, to mobilise private capital into sustainable infrastructure in India.

Big plans

These investments will support India’s target of 450GW renewable energy by 2030, according to a statement. The UK-India economic relationship is already strong with bilateral trade of over £18 billion in 2020, supporting nearly half-a-million jobs in each other’s economies.

Also read: India-UK FTA: UK govt lists out the benefits to its industry

Earlier this year, the UK and Indian Prime Ministers launched the UK-India 2030 Roadmap to bring the economies and people closer together over the next decade and boost cooperation in areas of common interests. The countries have also set out an ambitious goal to double trade by 2030, including through negotiating a Free Trade Agreement.

At EFD, the Chancellor and the Finance Minister agreed to be ambitious when considering services in the upcoming UK-India trade negotiations, which could open up new opportunities for UK financial firms and help Indian companies to access finance in London. Services account for 71 per cent of UK GDP, and 54 per cent of Indian GDP.

Rishi Sunak said, “The UK and India already have strong ties, and today we’ve made important new agreements to boost our relationship and deliver for both our countries. Supporting India’s green growth is a shared priority so I’m pleased that we’ve announced a $1.2 billion investment package, and launched the new CFLI India partnership, to boost investment in sustainable projects in India as the UK gears up to host COP26. With trade negotiations also coming up, our agreement to be ambitious when considering services will create new opportunities in both markets, supporting jobs and investment in the UK and India.”

Private sector investments

Apart from a $1 billion investment from the CDC, the UK’s development finance institution for green projects, in India between 2022-2026, this engagement builds on CDC’s $1.99 billion existing portfolio of private sector investments in India.

Also read: India to cooperate with G20 to promote gender equality, women empowerment, says Irani

Joint investments by both governments to support companies working on innovative green tech solutions, and a new $200 million private and multilateral investment into the joint UK-India Green Growth Equity Fund which invests in Indian renewable energy have also been planned.