Building New Bridges: UK and India Deepen Capital Markets Ties

The UK and India have announced several key initiatives to boost capital markets cooperation and cross-border investment flows between the two finance hubs. These developments come as part of the latest UK-India Economic and Financial Dialogue held in Delhi. This article will explore the key announcements and their implications for financial services firms and professionals.

Expanding Listing Destinations for Indian Firms

A major milestone was India agreeing to explore allowing overseas direct listings of Indian companies on the London Stock Exchange. This follows India opening up international listing access for domestic firms beyond just Indian exchanges. It highlights London’s strength and potential as a global fundraising venue and capital raising gateway for large Indian corporations seeking wider investor exposure.

London offers Indian firms deeper access to the massive EU investor base along with the advantages of a highly liquid market. It also provides an avenue to raise capital in a foreign currency like USD or Euros. An LSE listing can raise the global profile of Indian companies. However, key considerations around regulation, valuation, and post-listing governance need resolution.

Boosting Two-Way Insurance and Pension Investment

The UK and India also launched a bilateral Pensions and Insurance Partnership focused on knowledge exchange, policy collaboration, and increasing cross-border investment between their substantial insurance and pension sectors. It includes plans for UK pension fund trade missions to India to catalyse greater capital flows and vice versa.

Deepening ties in this critical area aims to provide growth opportunities as India’s insurance market expands rapidly driven by economic expansion and rising household incomes. UK firms bring experience in areas like ESG integration and risk management. Meanwhile Indian insurers offer lessons around low-cost models and digital distribution access.

Sharing Infrastructure Development Expertise

Additionally, the two countries will co-lead a new Infrastructure Financing Bridge partnership. This initiative between India’s NITI Aayog think tank and the City of London Corporation aims to share specialized expertise on structuring and financing large infrastructure projects.

With India forecasted to need over $1 trillion in infrastructure investment by 2025, this collaboration could support sustainable development of critical projects in areas like renewable energy, transportation networks, digital infrastructure, and urban development.

Driving Closer Capital Markets Alignment

According to UK Chancellor Jeremy Hunt, enhanced capital markets cooperation will enable the UK and India as “Europe’s Silicon Valley” and “Asia’s Silicon Valley” to partner on technology, investment, sustainability, and other key opportunities.

For financial services firms and capital markets professionals in both countries, these latest announcements open up partnerships, exchange, and investment potential across interconnected sectors. Closer collaboration between major global finance hubs promise innovations in green finance, fintech, alternative investments, and ESG ecosystem networking.

Connecting Specialized Cross-Border Financial Talent

As the UK and India build closer capital markets ties, demand will likely grow for financial services talent able to understand the dynamics of both markets. Victus Search can connect financial institutions to professionals possessing the specialised expertise to bridge the UK-India corridor and capitalise on emerging cross-border opportunities. Contact us to explore your hiring needs.