India has invited UK corporations to engage in the insurance industry, while the UK has offered its London market to Indian enterprises for a direct listing. India raised the foreign direct investment cap from 49 per cent to 74 per cent this year. Previously, the government permitted companies to list on foreign exchanges without also listing on the home market.

The inaugural meeting of the India-UK Financial Markets Conversation was conducted on Thursday late evening to enhance bilateral connections in the financial sector, according to a finance ministry statement, adding that the dialogue was formed at the 10th Economic and Financial Dialogue (EFD) in October 2020.

The government-to-government conversation focused on four themes: GIFT City, India's premier international financial centre, banking and payments, insurance, and capital markets, according to the statement. Private sector partners were invited to the conversation after the government-to-government session, according to the statement.

Participants from India and the United Kingdom discussed issues in the insurance business, including domestic updates on Covid-19's effect, possibilities to promote UK investment in the Indian market, and the UK Solvency II Call for Evidence. Participants also discussed capital market cooperation, with the UK outlining progress on regulatory changes, including the Wholesale Markets Review and the Lord Hill Listings Review, according to the statement.

There was also a fruitful discussion about prospects for expanded cross-border business, which included an update from India on the implementation of the direct listing policy. “Both sides agreed to continue to engage bilaterally on these areas in the coming months, in the run-up to the next EFD and the beginning of negotiations for a future India-UK FTA, both expected to take place later this year,” it said. Both parties agreed that there is a tremendous opportunity for developing financial services collaboration between India and the UK as two services-driven economies, according to the report.

Participants presented updates on their different banking and payments landscapes, according to the statement, in order to boost cross-border engagement in this sector. The Bank of England highlighted its cyber resilience efforts, and both parties acknowledged the critical role played by the banking sector in preserving stability during the Covid-19 epidemic.

Senior officials from the Finance Ministry and the UK Treasury led the discussion, which included representatives from India's Reserve Bank, the Securities and Exchange Board of India, the International Financial Services Centre Authority, India's Insurance Regulatory and Development Authority, the Bank of England, and the Financial Conduct Authority.