India, UK to collaborate on FinTech and sustainable finance
India and the UK recognised the key role the banking sector has played in maintaining stability during the Covid-19 pandemic
India and the United Kingdom on Thursday late evening held the inaugural meeting of the India-UK Financial Markets Dialogue in a virtual format and focused their discussion on core areas of banking and payments, insurance, capital markets and Gujarat International Finance Tec-City.
The Dialogue was led by senior officials from the Indian side by the Ministry of Finance and from the UK, the Treasury with participation from Indian and UK independent regulatory agencies, including the Reserve Bank of India, the Securities and Exchange Board of India, International Financial Services Centre Authority, Insurance Regulatory and Development Authority of India, the Bank of England, and the Financial Conduct Authority.
Private sector partners were also invited to the discussion. The City of London Corporation’s Capital Markets Working Group presented their work on the Indian corporate bond market, and the India-UK Financial Partnership presented their recommendations on the UK-India financial services relationship, particularly on development of GIFT City as global services hub.
As two services driven economies, both sides agreed that there is significant scope for strengthening the financial services cooperation between India and the UK. They also concurred 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.
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.
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.
Participants discussed 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.
Participants also took stock of capital markets cooperation. The UK outlined progress on regulatory reforms, including through the Wholesale Markets Review and the Lord Hill Listings Review. 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.
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.
Participants then welcomed leaders of the India-UK Financial Partnership (IUKFP), noting the significant progress achieved since the last EFD in contributing to policy development, particularly the Partnership’s efforts towards promoting greater links between GIFT City and the UK financial services ecosystem.
Both sides look forward to formally collaborating with the Partnership’s FinTechworkstream at the next UK-India FinTech Joint Working Group meeting and to the launch of policy papers on GIFT City, FinTech and cross-border trade and investment at the next EFD and beyond.
At the meet, the City of London Corporation India-UK Capital Markets Working Group presented its recommendations from its recently published paper on ‘Unleashing the potential of the Indian Debt Capital Markets’.
The report focused on enhancing the Indian Debt Capital markets ecosystem, as well as making it easier for Indian companies to raise capital internationally – to support India’s growth potential, infrastructure needs and enhancing the country’s sustainable energy capacity. The recommendations include areas such as reforms to primary issuances, secondary markets, taxation rules, market ecosystem and ESG.