LONDON: India and the UK have agreed to strengthen their economic cooperation in infrastructure and financial services as they vowed to address cross-border tax evasion and avoidance.
Finance Minister Arun Jaitley, who held talks with his UK counterpart George Osborne as part of the 8th India-UK Economic and Financial Dialogue and had a series of meetings with UK-based investors and fund managers, yesterday said that his visit here had carried the economic and financial dialogue with Britain forward.
After talks between Jaitley and Osborne, a joint statement was issued that talked about advancement of cooperation in a range of sectors including infrastructure financing, addressing issues of cross-border tax evasion and avoidance besides opening up of the Indian legal sector to foreign lawyers.
"From the Indian point of view, we were extremely interested in having the British investors look at infrastructure investments in India for which various possibilities were discussed. Britain has been cooperating and also extremely keen that large British companies, particularly involved in infrastructure financing, start investing in Indian infrastructure," Jaitley said.
"The possibility of their investing, either directly in projects or through the National Investment and Infrastructure Fund (NIIF) that we have created, were both discussed," he told reporters at the Indian High Commission here.
During the talks, which included senior representatives from Finance Ministries, Central Banks and key regulators of both countries, the two leaders discussed ways to strengthen the Indo-UK existing economic partnership in order to further boost trade and investment, and to build on the success of Prime Minister Narendra Modi's recent summit with his British counterpart David Cameron in the UK.
"Given the fact that even in a somewhat difficult global scenario, India is managing a reasonable growth rate, this is one of the better options that investors have and that kind of a sentiment gets really echoed in the meetings with the investors that we had. Of course, the investors are also keenly watching which way our reform process in India goes," Jaitley said.
"The global economy is facing serious challenges and therefore the estimates of global growth also have been repeatedly lowered. Compared to how various countries across the world have been doing, India's growth rate despite these challenges is probably the highest in the world among major economies," he said, in reference to his meetings with investors at Goldman Sachs and London Stock Exchange.
As a follow up on Prime Minister Modi's announcement during his UK visit last November on the listing of Rupee bonds in London, the Minister said, "the UK is very keen for these to be listed in London and broadly the economic and financial dialogue was carried further".
"The UK and India share a common commitment to address cross-border tax evasion and avoidance. Both sides have committed to the Common Reporting Standards (CRS) on Automatic Exchange of Tax Information (AEoI) and will begin exchange in 2017," the joint statement said.
"We call on other countries to meet the commitments they have made and to implement the new standard on time," the statement said.
During the dialogue, the two sides recognised that as the leading financial centre in the world and in the view of successful issuance of Masala bonds issued by the International Finance Cooperation last year, London will be an attractive location for issuance of rupee-denominated bonds.
"The bonds, which were first announced during the visit of Prime Minister Modi to the UK in November, illustrate the crucial role that the UK's capital markets can play in an enhanced economic relationship with India, with UK investors providing financing for the transformation of India's infrastructure and continued rapid economic growth," it said.
India and the UK also agreed that the development of deeper markets in rupee-linked products, and the increasingly sophisticated relationship between the Indian and UK financial sectors, are important underlying factors in fostering an enduring economic and financial partnership.
Both sides agreed to continue working closely on the development of smart cities in India.
"We will continue to build on and further embed the existing Technical Assistance Partnerships that were announced during Prime Minister Modi's recent visit to the UK, and to continue working together on research collaboration and other measures to support India's 100 Smart Cities programme," the statement said.
While noting the strength of the economic outlook for both countries, the two sides expressed concern that global growth is falling short of expectations and that the risks to the global outlook have increased.
"In this regard we stand ready to take the necessary steps to open up trade and markets to support growth and jobs, and agree on the importance of structural reforms and pursuing credible fiscal policies in order to raise living standards," it said.
India and the UK also agreed to work together with the aim of developing an Indo-UK partnership fund under the umbrella of the NIIF. The fund will seek to increase flows of private sector capital and expertise alongside multilateral support into Indian infrastructure.
The working group to be established will report back within the course of 2016 on a proposed fund strategy and delivery approach, the statement said.
"As part of this, India and the UK also both recognise the importance of identifying the sector or sectors where there is greatest potential for developing sustainable project pipelines, and of developing a supportive institutional environment for investment and delivery," it said.