India Mulls Direct Listing of Businesses on LSE

Chancellor Jeremy Hunt shared that India’s interest in direct listings on the LSE marks a significant step forward….reports Asian Lite News

Indian companies are considering direct listings on the London Stock Exchange (LSE), a move highlighted during talks between UK Chancellor Jeremy Hunt and Indian Finance Minister Nirmala Sitharaman. The discussions also focused on the imminent finalisation of a Free Trade Agreement (FTA) between India and UK.

Hunt, speaking at a press conference, shared that India’s interest in direct listings on the LSE marks a significant step forward. This development coincided with both countries moving closer to signing the much-anticipated FTA.

“I’m very proud of the progress we have made through the UK-India Economic and Financial Dialogue (EFD) this time. It’s a big step forward to hear India confirming that they’ll explore the London Stock Exchange as an international destination for the direct listing of Indian companies,” Hunt said.

“I see India as Asia’s Silicon Valley and the UK as Europe’s Silicon Valley, so there’s a lot we can work on together.”

He said the next step for this is a comprehensive FTA and bilateral investment treaty and “I know discussions are ongoing as to how to finalise those as soon as possible.”

Sitharaman echoed his view, but suggested that the negotiations will continue over the point of differences related to the proposed FTA.

“As you know, we agreed to have the investment negotiations (on FTA with UK) running parallel to the goods and services trade negotiations. So, we will be looking at points where there are convergences and if there are points on which we have to have further discussions, we will hold it. The keenness on both the sides is to conclude it as soon as possible,” she said.

“The intention on both the sides is to expedite the discussions so that some quick agreements can lead to finally signing the FTA.”

The announcements come within 48 hours after Prime Minister Narendra Modi and his British counterpart Rishi Sunak, in their bilateral meeting on the sidelines of the G20 Summit, agreed to “work at pace” towards signing the much-anticipated FTA.

Hunt said that there is a new pensions and insurance partnership between the two countries, along with the establishment of knowledge and expertise sharing mechanism.

Sitharaman told reporters that India and the UK “are highly encouraged” by the intensified collaboration in the area of financial services.

They also announced the launch of the “new UK-India Infrastructure Financing Bridge”.

This is a collaborative venture co-led by government think tank Niti Aayog and the City of London Corporation which is aimed at harnessing collective expertise in planning and implementing major infrastructure projects, Sitharaman informed.

Total trade between the UK and India was worth £36.6 billion in the last financial year, up over 34% year on year, with an £82 million increase in UK-Indian financial services trade over last year. EFDs are a regular way of deepening ties to grow the economies of both countries.

Investment between the UK and India so far already supports over half a million jobs across both economies, and UK businesses sold goods and services worth around £15 billion to India in 2022.

Meanwhile, other major announcements as part of the EFD, include the signing of the UK guarantee to the World Bank to unlock an additional $1 billion of green financing in India.

This will promote clean energy investment and support green growth targets, accelerating India’s climate transition and ability to meet COP26 commitments. It is hoped that it will encourage other international partners to support India and shape the world’s climate transition.

An agreement was also announced to explore new investment opportunities in areas of shared priority, including leveraging institutional capital to invest in climate adaptation and green businesses in India.

This builds on the success of the Green Growth Equity Fund, India’s first dedicated climate change fund backed by British International Investment.

During the G20 leaders’ summit, Rishi Sunak announced that the UK will provide $2 billion to the Green Climate Fund – the biggest single funding commitment the UK has made to help the world tackle climate change, which will make a significant contribution towards the UK’s pledge to spend £11.6 billion on international climate finance, cementing our global climate leadership.

It also comes after the recently announced ‘Alive with Opportunity’ campaign from the UK government, designed to showcase the deep bond between Britain and India and build on the continuous exchange of people, ideas and culture. The campaign is part of the UK’s ambitions to double trade with India by 2030.

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