In a major turn of events against the backdrop of shifting global trade dynamics, India and the United Kingdom have once again reaffirmed their intent to enhance bilateral engagement with a priority placed on fast-tracking negotiations toward a comprehensive Free Trade Agreement (FTA) and a Bilateral Investment Treaty (BIT).
This pledge was emphasized during the 13th edition of the Economic and Financial Dialogue (EFD) in London, co-chaired by India's Finance Minister Nirmala Sitharaman and the UK Chancellor of the Exchequer, Rachel Reeves.
According to a joint statement issued after the talks, the UK updated India on its forthcoming Industrial Strategy, voicing interest in coordinating efforts in priority areas including advanced manufacturing, life sciences, clean energy, financial services, creative industries, and defence. The partnership seeks to combine the UK's technological capabilities and India's emerging status as a global manufacturing and innovation hub.
Both countries also welcomed the signing of the 'India-UK Defence Industrial Roadmap', intended to deepen industrial cooperation and develop robust supply chains in the defence sector.
The two countries welcomed the growth of trade in financial services in recent years and vowed to build more momentum on this front. They also recognized the progress during the Financial Markets Dialogue (FMD) that took place in GIFT City's International Financial Services Centre (IFSC) in December 2024. The second round is due to take place in London later this year.
The UK welcomed India's recent move in permitting insurance firms located within GIFT IFSC to invest overseas as well as the proposal to extend similar sanction to pension funds operating in the same zone.
Both parties also looked at how to improve access to capital via the UK bond markets, such as increasing the utilization of rupee-denominated Masala Bonds to assist Indian firms in raising foreign funds. A favorable policy framework to develop these instruments is being collaboratively formulated.
Talks also dwelt on the growing globalisation of the Indian rupee. The UK welcomed India's move to allow rupee accounts overseas and made London's worldwide financial environment available as a platform to facilitate this process.
Besides, both sides also acknowledged the UK asset management industry's potential to facilitate infrastructure investment by way of the UK-India Infrastructure Financing Bridge. Work to develop a strong policy framework to allow Indian investors to reach international funds will proceed, with additional talks scheduled for the next FMD.
The two governments also recognized the increasing significance of transition finance in promoting sustainable development objectives. The UK Transition Finance Market Review and India's efforts in this area were both appreciated as part of the common aspiration to mobilise green capital.
Reiterating their shared economic vision, the statement concluded: "We are united in our ambition to ensure financial stability, stimulate investment, and transform our economies for growth and prosperity. Our strong economic relationship is reflected in bilateral trade exceeding £40 billion, alongside significant mutual foreign direct investment."
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