New Delhi: India and the UK are expected to sign agreements in the financial sector aimed at improving the business climate in India during Prime Minister Narendra Modi’s first official visit to Britain next week.
While details of any deals planned have not been released yet, a Financial Times report indicated that recommendations by the India-UK Financial Partnership (IUKFP) are likely to form the basis of these agreements.
IUKFP, led by Kotak Mahindra bank founder Uday Kotak and Standard Life chairman Gerry Grimstone, calls for a deeper collaboration between the financial centres of London and Mumbai. The partnership was set up last year by finance ministers in both countries – Arun Jaitley and George Osborne.
“The logic behind it is to get a group of practitioners from both countries and use them as a resource for Indian policymakers,” Grimstone told the newspaper. Suggestions by IUKFP include a focus on changing India’s insolvency regime to improve the ease of doing business and increasing the country’s national pension savings rate from 4 per cent of the population. India’s growing corporate bond market is also the source of particular focus, with attention paid to limits on foreign ownership of bonds and the importance of developing an alternative finance stream at a time when Indian banks are constrained by ballooning non-performing loans, according to the partnership.
It also recommends liberalisation of the so-called “Masala Bond” market of offshore Indian-rupee bonds as the country moves towards greater international development of its currency. Modi arrives in London on November 12 and has a packed schedule during his three-day visit, which includes a lunch hosted by Queen Elizabeth II. However, it will be UK Prime Minister David Cameron who will play host for the majority of Modi’s stay in the UK, including introducing him to a packed crowd of 60,000 at his Wembley Stadium address in London on November 13.
There is much speculation in the British media over the nature of deals expected to be announced with India, coming in the wake of multi-million-pound agreements struck with neighbouring China during President Xi Jinping’s state visit here last month.