The third meeting of India-UK Financial Markets Dialogue was hosted by Department of Economic Affairs, Ministry of Finance in GIFT City, Gujarat on 12th December 2024

Participants from India and UK touched upon reforms in respective financial services sectors including capital markets, insurance & reinsurance, pensions, FinTech, sustainable finance and International Financial Services Centre

Opportunities for inter-regulatory cooperation and private sector collaboration to increase bilateral trade and investment in financial services were also discussed

The 3^rd India – UK Financial Markets Dialogue (FMD) took place on 12^th December 2024 at GIFT City in Gujarat, India.

The Dialogue was led by senior officials from the Indian Ministry of Finance and HM Treasury, with participation from Indian and UK regulatory agencies, including the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), International Financial Services Centre Authority (IFSCA), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA), the Bank of England (BoE) and the Financial Conduct Authority (FCA).

The Dialogue opened with reflections on developments since the last meeting in April 2023, including the opportunity presented by India’s intention to release a financial sector vision and strategy and the UK’s commitment to publishing a financial services growth and competitiveness strategy. Both sides agreed to work to maximise synergies.

Delegates from India and the UK shared perspectives on priorities and ongoing reforms within their respective jurisdictions. The Dialogue focused on collaboration in evolving fields of financial regulation, noting the areas of mutual interest in both markets for increasing bilateral trade and investment between the financial sectors.

Delegates then discussed work on developing our capital markets, noting recent UK reforms to primary and wholesale regimes and new and innovative products launched in India’s capital markets. Both parties reflected on the emerging recommendations from the India-UK Financial Partnership (IUKFP) Capital Markets Working Group report, due to be published at the next Economic and Financial Dialogue (EFD) and explored further possibilities for increasing cross-border investment, including through direct listings of Indian companies in GIFT IFSC as a first step towards direct listing at the London Stock Exchange and other foreign jurisdictions in future.

Participants discussed their respective insurance regulations and market opportunities. India updated on reforms done and proposed in the insurance sector and noted UK developments on Solvency II and incentivising investment into productive assets. Both parties updated on planned activity under the Pensions and Insurance Workplan, citing opportunities in reinsurance presented by India’s ongoing reform of the regulatory framework for reinsurance, including Order of Preference regulations, and in the London Market. The UK welcomed recent increases in investment into the Indian market by UK insurance companies, and India’s proposal to increase Foreign Direct Investment limits in the insurance sector.

Delegates also discussed ongoing reforms in respective pensions sectors. The UK set out recent reforms announced by the Chancellor of the Exchequer at Mansion House, including the intention to introduce a new Pension Schemes Bill next year, consolidating defined contribution schemes into larger funds. Indian representatives presented on efforts to increase workplace pension participation rates and develop pay out methods. Both sides agreed on the opportunity presented by reforms for exploration of areas of mutual interest, and to support the mutual ambition of driving growth. The UK welcomed the recent notification of pension schemes as financial products to be regulated by IFSCA. It also noted that insurance companies in GIFT-IFSC are allowed to invest overseas and the proposal to enable pension companies in GIFT IFSC to invest overseas is under consideration. 

Innovation was a key theme throughout the dialogue, acknowledging the importance of Fintech, and the key role of financial data in enabling business activity. Both parties highlighted priorities identified in the IUKFP Fintech and Data Paper published last year and agreed to host the next meeting of the India-UK Fintech Joint Working Group in early 2025 to take forward agreed priorities. Participants discussed related priorities, including the G20 payments roadmap, digital payment connectivity, regulatory sandbox collaboration, collaboration on Central Bank Digital Currencies, and future cooperation on other emerging technologies including AI and Quantum computing.

The dialogue highlighted the importance of sustainable finance in facilitating a low carbon transition to tackle the climate change. The UK highlighted important outcomes from COP29, and recent Mansion House reforms. India updated on their intention to introduce a climate finance taxonomy as well as recent reforms in the IFSC. Both sides discussed reporting, disclosures and transition finance, as well as reflections on recent Sovereign Green Bond issuances and forward plans. Both sides agreed on the need to continue engaging on sustainable finance, including through the next meeting of the India-UK Sustainable Finance Forum in early 2025.

Finally, participants heard updates on the growth of India’s International Financial Service Centre within GIFT City, noting the location of this edition of the Dialogue, and their plans for further cooperation. They also heard from the UK on the City of London’s strengths as an internationally renowned financial services centre and the opportunity for further collaboration between the two.

The group closed by welcoming the important role of the Dialogue in advancing financial services cooperation between India and the UK, noting the mutual interest in driving stronger growth, growing trade, and creating the right environment to realise the significant commercial opportunities between our markets. The group reaffirmed the important role of the India-UK Financial Partnership in supporting business-to-business links between the markets and providing recommendations on opportunities for addressing any frictions to support further trade and investment.

Cross-border financial cooperation to facilitate listings, regulatory alignment and joint workstreams driving investment and market access. The Dialogue prioritised facilitation of cross-border financial services and investment through regulatory alignment and market-access measures across capital markets, insurance, pensions, FinTech, sustainable finance and the IFSC. Key operative measures included exploring direct listings via GIFT IFSC, proposed increases in foreign investment limits in insurance, reforms to reinsurance frameworks and pension regulation to enable overseas investment, and joint workstreams-notably the Capital Markets Working Group, Fintech Joint Working Group, and Sustainable Finance Forum-to advance regulatory sandbox collaboration, digital payment connectivity, CBDC cooperation, disclosure standards and transition finance.