Out-Law News | 10 Jul 2014 | 2:15 pm | 1 min. read
British chancellor of the exchequer George Osborne said the credit is “the biggest ever offered to support a sector in a single country and a commitment to guarantee certain rupee-denominated export related loans”.
The credit line was confirmed on 8 July during an economic and financial meeting in India between Osborne and Indian finance minister Arun Jaitley.
According to a joint statement from the ministers (3-page / 224 KB PDF), the credit line from the UK Export Finance (UKEF) agency is designed to support projects such as developing a 'corridor' between India’s financial and technology hubs of Mumbai and Bangalore.
The statement said “10 global banks are in discussions with UKEF to deliver government funded loans through the £3bn Direct Lending Scheme, with more banks expected to join them in the coming weeks... and provide competitive finance to purchasers of UK exports in India”.
The statement said “further progress” was made on India’s proposed ‘Infrastructure Feeder Fund’ (3-page / 288 KB PDF), in designing a “London-based fund targeted at raising capital at scale from the London market” for investment in Indian infrastructure debt.
A ‘UK-India Financial Partnership’ is also being established, under which both governments will support financial services industries in forging “closer ties between London and Mumbai as financial centres”, the statement said.
The partnership will cover “collaboration to develop the Indian corporate bond market, mutual sharing of expertise on banking regulation and capitalisation, enhancing financial training and qualification and developing a programme around the opportunities to improve cross border provision of financial and insurance services”, the statement said.
UK government figures show that goods exported to India since the first quarter of 2010 have increased by a half and goods imports from India by a third. In 2013, the UK exported £7.7bn ($13bn) worth of goods and services to India and imported £8.8bn ($15bn) goods and services from India. The UK said it is the third biggest investor in India (after Singapore and Mauritius) and invested $3.2bn in 2013 to 2014.