New Delhi: India and the United Kingdom (UK) decided on Tuesday to jointly invest up to £240 million in an India-UK fund to finance India’s rapidly growing energy and renewables market. The fund aims to leverage private sector investment from London and is likely to raise around £500 million initially.

After the ninth UK-India Economic and Financial Dialogue between UK chancellor of the exchequer Philip Hammond and India’s finance minister Arun Jaitley on Tuesday, both sides said in a joint statement that the proposed fund will be set up under the National Investment and Infrastructure Fund (NIIF).

“Progress will be accelerated by starting the process of appointing a fund manager now (by the autumn) with early market engagement via the publication of a blueprint, with the aim to identify additional and complementary sectors for fund investments," the joint statement said.

Speaking to reporters, Jaitley said India and the UK can start discussions on a bilateral free trade agreement only after the UK formally exits the European Union. “Obviously, this can be formally discussed after the Brexit takes place but it is probably going to imply a far wider and a far higher engagement between the two countries. What shape it is going to take can only be formalised post Brexit negotiation," Jaitley said.

On the question of India’s request to extradite Vijay Mallya from Britain who is facing economic offence charges in India, Hammond said the matter is sub-judice and it is not proper for ministers to discuss it.

India-UK Financial Partnership (IUKFP), under its co-chairs Uday Kotak and Gerry Grimstone submitted reports on rupee internationalization and green finance.

The two finance ministers also agreed to renew the IUKFP’s mandate and sought more papers on bank restructuring, fintech, disinvestment, India-UK trade and investment relationship; recommendations from financial and professional services; and ease of doing business in financial and professional services.

India and the UK agreed to deepen bilateral collaboration on fintech and explore the possibility of a regulatory cooperation agreement between the Financial Conduct Authority and the Reserve Bank of India in the second quarter of 2017, which will enable the regulators to share information about financial services innovations in their respective markets, including emerging trends and regulatory issues. “The feasibility of a UK-India FinTech Bridge would also be explored," the joint statement said.

Both sides said under agreed common reporting standards, automatic exchange of tax information will begin in 2017. They also advocated all member countries to work towards the International Monetary Fund completing the 15th General Review of Quotas “by spring or no later than the annual meetings of 2019" under which developing countries are likely to get more voting rights within the Fund. “We also support work to strengthen the Global Financial Safety Net, with a strong, quota-based and adequately resourced IMF at its centre," the joint statement said.

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