UK eyes Bengaluru-Mumbai infra project; offers £1-bn line of credit

The United Kingdom on Tuesday announced an ambitious package of measures to support investment in Indian infrastructure that includes a £1 billion line of credit from UK Export Finance (UKEF) to support projects, such as Bengaluru-Mumbai Economic Corridor (BMEC).

Announcing this during talks with finance minister Arun Jaitley, UK's chancellor of the exchequer George Osborne said today that 10 global banks are in discussions with UKEF to deliver government-funded loans through the £3-bn direct lending scheme, with more banks expected to join in in the coming weeks.

This will provide competitive finance to purchasers of UK exports in India, he said.

Further progress has been made on the Infrastructure Feeder Fund whereby India's ministry of finance will facilitate Her Majesty's Treasury (HMT) of UK in its interactions with Infrastructure Debt Funds (IDFs) for exploring the design of a London-based fund targeted at raising huge capital from the London market for investment in Indian infrastructure debt.

''We signed an accord to formalise the cooperation between the UK and India on infrastructure and public-private partnerships''.

A joint communiqué issued after the meeting of the two finance ministers stated that the UK and India shared a common commitment to take the necessary steps to support growth and jobs, ensure financial stability and restore fiscal sustainability. In an increasingly globalised world.

''We will continue to work closely together and are committed to multilateral co-operation through the G20 and international financial institutions,'' it said.

India and the UK are taking determined actions to strengthen our respective economies and are working to improve further the business environment. Both sides welcomed this year's focused approach in the G20 to achieving strong, sustainable and balanced growth through the development of comprehensive growth strategies that will be presented at the Brisbane Summit.  

The two sides also said they remained committed to the Base Erosion and Profit Shifting project and that the two would continue to work together through the G20 and OECD to reform the international tax rules to ensure that they are fair and consistent.

India and the UK reiterated their determination to tackle tax evasion, noting that they would begin exchanging tax information on an automatic basis from 2017 with each other and with a large number of jurisdictions as part of their commitment to early adoption of the new Global Standard. Both countries called on other G20 countries and international financial centres that have not yet done so to match their commitments to early adoption.

Both countries emphasised the importance of investment, including in infrastructure and small and medium enterprises, to strengthen the global recovery and lift economic growth, and welcomed the G20's work developing country-specific and collective actions on investment, including the promotion of long-term private sector investment, and enhancing the catalytic role of multilateral development banks.

They also reiterated their strong supporter for the ambitious EU-India broad based trade and investment agreement (BTIA) that stands to bring significant benefits to businesses and consumers on both sides. ''The UK looks forward to negotiations between India and EU on BTIA,'' Osborne said.

Both countries agreed to pursue joint work on the common aim of exploring ways to encourage increased institutional investment in infrastructure.