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How keen is India on the UK-India FTA and could it be signed sooner than an EU one?
At the end of formal dialogue, minister Sitharaman, I and 60-odd businesses involved in the business forum are very strongly supportive of this FTA and we got down to details of the mechanics of which parts of government will do what. Everyone is committed to the FTA. The negotiations should start before the end of this year and you can see our track record, we have been at pace. We are the only European country which enjoys comprehensive and strategic relationship with India that the PMs agreed in May.
What can Indians expect to see in this FTA?
I am responsible for financial services and I can talk about that. India is a rapidly growing economy. How can we support Indian companies’ growth? We are strong at financial services here, we can help facilitate India’s growth and expansion and help get capital to them (companies). Indian companies have raised 13-14 billion pounds from the London markets. Over half of all masala bonds have been raised through London. There is a rapidly growing consumer financial services industry in India. For example, in insurance, where India is opening up markets. Financial services companies like HSBC and others are able to offer products, services to Indian consumers, often in partnership with Indians firms. This is good as it broadens choice for Indian citizens. There is already a very strong relationship between our countries that creates jobs in both countries and you would expect an FTA to do even more of that. There are about half a million jobs supported through trade and investment already. We are both services-oriented economies, so there is a particular opportunity for both of us in services, mainly financial services. If you think about India’s infrastructure ambitions going forwards, particularly around net zero, we can help finance those investments.
How can the UK help India achieve net zero?
What we announced today is $1.2 billion of direct investment into India. Of this, $1 billion is coming from CDC, the UK’s development finance institution, in green projects over the next five years. $200 million is a joint investment by us in the green growth equity fund.
We also need to unlock hundreds of billions, if not trillions, of dollars of private capital. Part of the announcement today was the Climate Finance Leadership Initiative (CFLI), a partnership involving the private sector and about $6 trillion of capital. The Macquarie Group and Tatas are involved in that. We recognise our responsibilities to help facilitate climate finance for the transition to net zero.
