India has invited UK companies to invest in the insurance sector, while Britain offered its London market for direct listing of Indian firms. This year, India has increased the foreign direct investment ceiling from 49 per cent to 74 per cent. Earlier, the government allowed firms to list overseas without simultaneous listing at the domestic market. To deepen bilateral ties in the financial sector, the first meeting of India-UK Financial Markets Dialogue was held on Thursday late evening, a finance ministry statement said, adding the dialogue was established at the 10th Economic and Financial Dialogue (EFD) in October 2020.
The government-to-government discussion focused on four themes — GIFT (Gujarat International Finance Tec-City) City, India’s flagship international financial centre, banking and payments, insurance, and capital markets, it added. Following the government-to-government discussion, private sector partners were invited to the discussion, the statement said. At the meeting, Indian and UK participants discussed matters relating to the insurance sector, including domestic updates on the impact of COVID-19, opportunities to encourage UK investment in the Indian market, and the UK Solvency II Call for Evidence.
Participants also took stock of capital markets cooperation, it said, adding 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 the implementation of the direct listing policy, according to the statement. As the two services driven economies, both sides agreed that there is significant scope for strengthening financial services cooperation between India and the UK, it said.
“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,” it said. The statement said participants provided updates on their respective banking and payments landscapes, to increase cross-border activity in this area. The Bank of England discussed its work on cyber resilience and both sides also recognised the key role the banking sector has played in maintaining stability during the COVID-19 pandemic.
The dialogue was led by senior officials from the Finance Ministry and UK Treasury, with participation from Indian and UK independent regulatory agencies, including the Reserve Bank of India, 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.