Rishi Sunak Says UK Working with India to Lead Global Economic Recovery; Strike New Covid-19 Research Tie-ups
FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak speaks during a daily news conference on the coronavirus disease (COVID-19) outbreak, at 10 Downing Street in London. (Reuters)
The decision was taken during the 10th Economic and Financial Dialogue (EFD) between India and the UK that also saw participation of UK Chancellor Rishi Sunak and Finance Minister Nirmala Sitharaman.
- PTI New Delhi/London
- Last Updated: October 28, 2020, 22:48 IST
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India and the United Kingdom on Wednesday agreed to establish a bilateral Sustainable Finance Forum to drive forward deeper cooperation on sustainable finance. The decision was taken during the 10th Economic and Financial Dialogue (EFD) between India and the UK that also saw participation of UK Chancellor Rishi Sunak and Finance Minister Nirmala Sitharaman.
"India and the United Kingdom enjoy close bilateral relations in diverse areas. India-UK economic ties are important as together they are two of the world's top seven economies with a combined GDP of over USD 5 trillion. "India-UK trade has more than doubled since the first EFD in 2007, with bilateral investment supporting over half a million jobs across both countries," Union finance ministry said in a statement.
The meeting discussed the response to the coronavirus pandemic to enable both countries to be enriched through experiences of the other. Issues related to international tax agenda, including development of inclusive consensus-based solution on the taxation of digital economy, were also discussed, the statement said.
"Deliberations on furthering of Financial Services Collaboration with special emphasis on Fin-Tech and GIFT City, establishment of an annual India-UK Financial Market Dialogue and measures underway to reform financial markets were also discussed. Infrastructure development and promotion of sustainable finance were also discussed with a focus on green finance," it said. It was also decided to establish bilateral India-UK Sustainable Finance Forum, the statement said, adding that private sector initiatives under the India-UK Financial Partnership (IUKFP) and India-UK Sustainable Finance Working Group were welcomed.
Generally, sustainable finance refers to investing in projects that promote sustainable development. Sitharaman highlighted the work being done by India's USD 1.4 trillion National Infrastructure Pipeline (NIP) and the City of London to ensure flows of sustainable finance.
This partnership is helping set up a Project Preparation Support Facility cum Centre of Excellence for PPP (Public Private Partnership) projects, as per the statement. The Green Growth Equity Fund (GGEF) was launched in 2018 as a joint venture with 240 million pounds funding to catalyse financing into green infrastructure in India. British Petroleum became the first private investor contributing USD 70 million, it added. According to the statment, FinTech agreement was reached to explore potential options for greater connectivity between India's Unified Payments Interface system and the UK payments system, and to support greater acceptance of Rupay cards in the UK.
"The UK is the second fastest growing G20 investor in India over the last 10 years. UK companies have invested nearly 22 billion pounds in India since 2000, creating more than 4,22,000 jobs. The UK is also India's second biggest research partner with joint research expected to be worth 400 million pounds by 2021," it said. India and the UK have also increased cooperation through the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure (CDRI), launched by Prime Minister Narendra Modi and co-chaired by the UK.
The UK Research and Innovation (UKRI) and the Indian Council of Social Science Research (ICSSR) have committed up to 2.6 million pound for four joint research projects on the future of UK-India trade and investment. Sitharaman said UK-India Fast-Track Startup Fund backed by SIDBI and the UK government will fund early-stage tech startups with technical assistance focused on capacity building, policy advocacy and deepening entrepreneurial connects with the UK.
During the meeting, it was agreed that the two countries will cooperate on combatting coronavirus under which UK Research and Innovation (UKRI) and India's Department of Biotechnology will jointly invest up to 8 million pounds for research to understand and address the factors leading to the severity of coronavirus in South Asian populations in the UK and in India. Indian investment in the UK is also strong and more than 800 Indian companies operate in the UK, employing more than 110,000 people, according to the statement.
India is now the UK's second largest source of investment in terms of number of projects with 120 new projects and over 5,000 new jobs in 2019-20, it added. Speaking at the bilateral meeting Sunak said "the UK's economic and financial relationship with India has never been more important with the global challenges we face".
"Today, we set out our ambition for even stronger ties, with an agreement that will increase investment and create and secure jobs. We are also committed to working together to lead the global economic recovery as we build back better after the pandemic," he said. A joint statement after the meeting said that globalisation has had a positive impact on the world, and "we remain strong advocates for open markets and the benefits of trade".
"We agree to keep key supply chains open and ensure any restrictions to trade are targeted, proportionate, transparent, and temporary whilst not creating unnecessary barriers to trade," it said. With regard to financial sector, it was agreed to establish a new annual India-UK Financial Markets Dialogue, to share expertise, experiences and deepen collaboration between our financial sectors.
The Dialogue will be led by senior officials from both finance ministries with participation from financial regulators and the private sector, and the first meeting will take place early next year, it said. Both countries will establish a new UK-India strategic collaboration to accelerate the development of GIFT City (Gujarat International Finance Tec-City), India's first International Financial Services Centre. It will also promote greater links between GIFT City and the UK financial services ecosystem by bringing together both governments, regulators and business to share experiences and expertise.
The next EFD will be held in London in 2021.