Financial services must be at the heart of the UK-India relationship

The City of London is a partner of the world’s growth economies and in supporting India’s ambitions we help British businesses too, says Chris Hayward

In one of his first international trips the Foreign Secretary David Lammy visited India where he re-emphasised the significance of the UK-India relationship and made clear that the free trade agreement is the “floor and not the ceiling of our ambitions to unlock our shared potential and deliver growth, from Bengaluru to Birmingham.” 

Last week the City of London Corporation and the government of India signed an agreement demonstrating this ambition and the strength of our relationship not only in business and goods but in financial services. The UK-India Infrastructure Financing Bridge (UKIIFB) led by the City Corporation and the National Institution for Transforming India (NITI Aayog) leverages the UK’s expertise in structuring and phasing major projects in order to unlock infrastructure investment into India. NITI Aayog sits at the centre of Indian Prime Minister Narendra Modi’s Government as a think tank tasked with driving India’s impressive development of which infrastructure is a key fixture.

We were pleased that the initiative received the endorsement of the then UK Chancellor and Indian Finance Minister last September, when it was announced at the UK-India Economic and Financial Dialogue in New Delhi. We have worked since then to deliver on that announcement.

India set to be the world’s third largest economy

India is one of the world’s fastest growing major economies, set to become the third largest globally by 2028 – just four years away. Its ambitious infrastructure development presents immense opportunities for the world’s leading investors and the UK wants to be first in line. While supporting India’s ambitions to develop and grow domestically, the initiative also gives UK businesses – many of which make up our expert steering committee – an opportunity to assess specific infrastructure projects and make recommendations that help mobilise capital across the board. The City of London is a partner for the growth of economies around the world, and creating the space for these conversations is essential. 

Our partnership isn’t only about national impact for the UK and India however, it also brings global benefits by advancing standards and objectives for sustainable infrastructure. Green infrastructure and finance are crucial to climate strategy solutions in both developed and developing countries. By incorporating a focus on sustainable projects, such as renewable energy and green urban development, the partnership can support India’s transition to a low-carbon economy. Additionally, it sets a precedent for international cooperation on sustainable infrastructure financing, positioning the UK as a leader in the global effort to combat climate change.

We want the bridge to help align the infrastructure financing policies of both countries with global best practices, ensuring that investments are not only economically viable but also environmentally sustainable. 

The City of London is a truly global financial centre not only within the capital where more than 300 languages are spoken but also beyond our shores where initiatives like the UKIIFB will play a part in India’s economic progress. 

Of course, we welcome the ongoing FTA negotiations between India and the UK and hope for an agreement that adequately prioritises financial services – particularly data flows and investment protection – but the UKIIFB is a sign of the unique progress that can be made with public-private sector partnerships and the shared ambition to solve complex issues. 

Economic growth and how we produce it remains the key focus for the UK. There is plenty to do to produce results in the short term but we must also work to become a one-stop shop for green finance expertise – a demand that will only increase. The UK is very much a services economy and if we want to have an impactful business relationship with India it is essential that our growing financial services partnership is at the heart of it. 

Chris Hayward is policy chairman of the City of London Corporation