India and the U.K. on Tuesday agreed to jointly set up a £240-million (around $300 million) equity fund for the green energy sector in the country.
The two countries would invest an equal amount into the fund, Finance Minister Arun Jaitley told reporters after discussions with the visiting delegation headed by U.K. Chancellor of the Exchequer Philip Hammond. He added that the Green Growth Equity Fund would be a part of the National Investment and Infrastructure Fund (NIIF).
The discussions were a part of the ninth U.K.-India Economic and Financial Dialogue, and has added significance in the light of the U.K. formally initiating the process to make its exit from the European Union.
The issue of signing a free trade agreement can't formally be settled till the U.K. completes its exit from the European Union, Jaitley said, adding that he would like to see more investments coming to India from the U.K.
India's significance as a business ally has increased for the U.K. on account of the former's growth as an economic power in the recent years, and because of Brexit, Hammond said.
The U.K. has been the largest G20 investor in India during the last 10 years, and India is the third-largest investor in the U.K., creating over 7,000 jobs last year alone, but there is much more that we can do.Phillip Hammond, Chancellor of the Exchequer, U.K.
He described India's economic partnership with the U.K. as one “among equals”.
The India-U.K. Financial Partnership panel which met on the sidelines of the main event also discussed ways of making the the rupee a more internationally-accepted and traded currency, said Gerry Grimstone, chairman of Standard Life and deputy chairman of Barclays Plc., who is the co-chair of the India-U.K. Financial Partnership.
The partnership presented also presented a paper on the subject, alongwith one to develop India's green finance market.
The process to make the rupee an internationally-traded currency would be a gradual one, said Uday Kotak, executive vice-chairman and managing director, Kotak Mahindra Bank Ltd., and also the co-chair representing India at the partnership.
Kotak said India wanted to learn lessons from experiences of the Chinese Renminbi and other currencies, and that the recommendation paper proposes a gradual approach to the process of internationalisation of rupee.
The delegations also discussed promoting masala bonds, where Indian companies would be able to borrow in their own currency from investors in London.
The National Highways Authority of India (NHAI) and the Indian Railway Finance Corporation plan to issue masala bonds soon, the representatives said.
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