The inaugural UK-India Financial Markets Dialogue (FMD) concluded with a further push for closer cooperation in finance and to open new opportunities for companies in both countries.
The first meeting of the UK-India Financial Markets Dialogue (FMD) concluded between senior representatives from both governments virtually this week, with the aim of strengthening bilateral ties in the financial sector and opening up new opportunities for business.
The creation of the FMD to deepen financial services cooperation and address regulatory barriers for UK and Indian companies was agreed at the 10th Economic and Financial Dialogue (EFD) between Finance Minister Nirmala Sitharaman and UK Chancellor Rishi Sunak last year.
The first dialogue saw government-to-government discussions to strengthen cooperation on four key themes:
- GIFT – Gujarat International Finance Tec-City, India’s flagship international financial centre
- banking and payments
- capital markets.
“The 2030 Roadmap agreed by Prime Ministers Modi and Johnson aims for a transformation of the UK-India relationship, especially as we look to build back better from Covid-19,” said Alex Ellis, British High Commissioner to India.
“The first Financial Markets Dialogue held today will strengthen links on financial services and create new opportunities for UK and Indian business. I’m pleased to see the strong progress we have already made ahead of the upcoming Economic and Financial Dialogue between our finance ministers,” he said.
The virtual meeting was led by senior officials from the UK Treasury department and the Indian Ministry of Finance, with participation from independent British and Indian regulatory agencies. The agencies involved included the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), International Financial Services Centre Authority, Insurance Regulatory and Development Authority of India, the Bank of England, and the Financial Conduct Authority (FCA).
“At the meeting, Indian and UK participants discussed progress on the UK-India GIFT City Strategic Partnership. Both sides agreed on areas for further collaboration, including sustainable finance and FinTech, with the aim of supporting increased UK industry presence in the centre,” reads the joint statement issued at the end of FMD meeting.
“Participants provided updates on their respective banking and payments landscapes, with a view to increase cross-border activity in this area. The Bank of England discussed its work on cyber resilience. Both sides also recognised the key role the banking sector has played in maintaining stability during the Covid-19 pandemic,” it notes.
The City of London Corporation’s Capital Markets Working Group presented its findings on the Indian corporate bond market, and the India-UK Financial Partnership presented recommendations on the UK-India financial services relationship.
“Participants also took stock of capital markets cooperation... There was also a productive discussion on opportunities for increased cross-border activity, including an update from India on implementation of the direct listings policy,” the joint statement said.
Matters relating to the insurance sector, including domestic updates on the impact of Covid-19, opportunities to encourage increased UK investment in the Indian market, and the UK Solvency II Call for Evidence were also on the agenda.
Both sides agreed to continue to engage bilaterally on these areas in the coming months, in the run up to the next EFD and the beginning of negotiations for a future India-UK FTA, both expected to take place later this year.
In May this year, Prime Minister Narendra Modi and UK Prime Minister Boris Johnson announced their ambition to double the value of UK-India trade over the next decade as well as an intent to begin work towards negotiations on a comprehensive free trade agreement (FTA).
According to the latest British government statistics, bilateral trade between the UK and India stood at over £18 billion in 2020, with India accounting for the UK’s second-largest source of investment in terms of number of projects.