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    mumbai gateway to india

The City of London manages a dedicated programme of engagement with India, facilitated through our representative office in Mumbai, which is celebrating a decade of presence in market.

Our India programme aims to promote the interests of UK-based financial services in India, and Indian firms who want to do business in the UK. Through dialogue and engagement between industry and government we have been working to strengthen the business links between the two countries, and boost trade in Financial and Professional Services. The Chairman of Policy and Resources, The Rt. Hon. the Lord Mayor and Special Adviser for Asia are senior figures for this agenda.

Our well-established presence in the UK and in Mumbai provides us with excellent connections into firms, policymakers, regulators and other stakeholders, as well as involvement in high-profile events and work programmes.

Our work is supported by the City of London India Advisory Council, established in 2007 to guide the City's engagement with India. Made up of senior representatives from India’s Financial and Professional Services industry, the group meets annually in Mumbai and London to review progress in financial services reform in India, discuss work on the City's priority areas over the preceding months and establish new areas of focus.

Our current areas of focus include

Bankruptcy, Insolvency and NPLs

​India’s Insolvency and Bankruptcy Code was introduced in 2016, following a system similar to the UK’s practitioner led insolvency regime. As a result, architecturally the Code has many similarities to the UK’s Insolvency Act 1986 and administration process.

The UK’s insolvency regime is one of the best in the world according to the World Bank. England and Wales rank 14 in the world in the 2017 Doing Business Rankings for Resolving Insolvency, compared to Singapore at 27, and India at 103 (World Bank June 2017 figures).

India’s Bankruptcy Law Reform Committee led the introduction of the code, seeking the opinion of a wide range of parties, including the City of London, with experience in the restructuring, turnaround and insolvency areas, both within the region and globally.

Since the law was passed in 2016, a great deal has been accomplished. But like any new structural change, many problems remain to be solved. There are new institutions that are being developed which can draw upon the expertise of UK’s robust insolvency regime and its expert insolvency practitioners. This is an area that the City of London would like to contribute more proactively, and we have already been exploring cooperation avenues with UK stakeholders, the Indian Regulator, and our India Advisory Council.

Rupee Internationalisation

​As the global leader in foreign exchange, the City of London has been engaged in developing and publishing policy papers and research on the internationalisation of the Indian rupee (INR) since 2010. According to the Bank of International Settlements, around $1 million INR was traded around the world every day in 2016- making it the 18th ranked currency. The London Stock Exchange is now the largest rupee denominated Masala bond centre globally with more than 40 bonds listed in total with an equivalent value of over $6 billion (source: LSE Oct 2017).

Given the increasingly important role the rupee will play in the global economy in years to come, and based on the City of London’s offshore RMB initiative experience, the City of London considers internationalisation of the rupee to be a priority.

We are now exploring how to support rupee internationalisation through research and data analytics, working alongside the India UK Financial Partnership, whose report ‘Internationalisation of the Rupee’ provides a useful basis for discussion.

Insurance

​The City of London is helping to foster development in the Indian Insurance sector, and engaging with stakeholders in both countries to help India become a leading international insurance and reinsurance centre.

We’ve already seen big developments in the loosening of restrictions surrounding foreign direct investment (FDI) in insurance companies, with the allowable FDI ratio recently increased to 49%. We are now actively working with industry and government to address direct and indirect tax implications of the Goods and Services Tax introduced in mid 2017 on insurance premiums, and have submitted recommendations to the Indian Finance Ministry.

The City of London India office has been working closely for many years on ensuring a ‘level playing field’ in India for international reinsurers. We have made several written representations to the Insurance Regulatory and Development Authority and the Finance Minister on regulatory best practices, ease of doing business and market development.

FinTech

​India is currently experiencing a FinTech boom. There is growing demand for both consumer and enterprise products, and billions have been invested in Indian FinTech startups.

The country has made marked progress in moving to a digital economy over the past few years. Government initiatives like demonetisation and the introduction of Aadhaar- the world's largest biometric ID system- have encouraged growth in card and mobile payments, the latter of which have been fuelled by the Unique Identification Authority of India’s “IndiaStack” platform that facilitates instant fund transfer via mobiles, which now sees millions of transactions on a monthly basis. Pradhan Mantri Jan-Dhan Yojana, the Prime Minister's People Money Scheme, has resulted in the opening of over 295 million bank accounts, since it was launched by the Prime Minister of India Narendra Modi on 28 August 2014 (source: PMJDY official data Aug 2017).

However, despite progress, significant gaps remain. More than 95% of transactions in India today are still carried out in cash (Source: RBI, October 2017), millions of bank accounts across the country are inactive, and nearly 20% of the Indian population is still entirely unbanked (source: ASSOCHAM-EY study).

The City of London, alongside UK and Indian stakeholders, is working to boost FinTech links between the UK and India. We organise regular roundtables and events on potential areas of collaboration such as regulation, and knowledge transfer (There is also practical guidance available for businesses wanting to expand in either direction in conjunction with the Department for International Trade and London & Partners).


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