How is City of London preparing for Brexit as it is now very certain?
Departure from the EU on 31st January is just the end of phase 1 of the Brexit process. The future trading relationship still needs to be resolved, and negotiations will be intricate and complex.
From the outset we have always said that a disorderly exit must be avoided and would be the worst possible outcome for the City, London and the UK.
The December 2020 deadline for new arrangements to be in place is ambitious and it is critical the services sector is not sacrificed in the rush to get a deal.
At around 80 per cent of the UK economy, the services sector is its lifeblood and vital to growth – the future framework must take proper account of this, securing maximum market access and developing a structure for the UK economy to prosper in the years ahead.
Do you think London would lose out as an International Finance Centre after Brexit? What City of London is doing to regain the losses of Brexit?
The UK’s fundamental strengths mean that no matter what the outcome of Brexit, the City will be embarking on a new chapter in its long success story.These are undoubtedly challenging times, but there is still so much to celebrate.Our status as a global financial capital arises from our unique combination of time zone, language, legal system, global talent, and financial ecosystem.And people come here not just for business, but for our burgeoning cultural and creative offer, our open spaces and our heritage.
Is it true that City of London had voted for `remain'?
We campaigned for “remain” in the 2016 referendum. But now we feel it is time to move on, develop a positive new relationship with the EU for financial services, and end the uncertainty for countless businesses based in the UK.
Do Indian banks and insurance companies and other companies have larger opportunities in London and UK after Brexit?
The UK and India already have strong ties. We’ve been the top G20 investor in India over the last ten years, and bilateral trade stands at over £20 billion.Financial services accounts for a small but growing proportion of this- £440 million- but there is plenty of room to grow our relationship in this area, particularly in areas like cyber, green finance, fintech and insurance.
Government support on both sides remains strong, and work is already underway to strengthen ties through the ongoing UK-India Joint Trade Review, the only one of its kind the UK has with any other country, and one which will lay the framework for the future trade partnership.
But this isn’t the only partnership between our two nations. There’s also the Joint Economic and Trade Committee (JETCO) looking at strategic economic ties, and the Economic and Financial Dialogue (EFD), focussing on trade and investment relations. Add to this mix the commitment by Prime Minister Boris Johnson to making India one of his first destinations for an overseas visit following his re-election, and the future looks rather rosy for us both.
Based on the willingness of both sides, I’m sure there will be a post-Brexit trade deal between India and the UK, but do remember these things take time. First and foremost, we need to get an agreement on the future of the highly complex UK-EU trading relationship.
There’s lots we can do to improve trading relationships outside a trade deal, though, and we will be looking for opportunities.
What kind of FDI you want in the Indian insurance industry? It is now 49 per cent.
We’d like to see the bar raised.Take-up of insurance remains an issue in India, where insurance penetration is 3.49%, well below the world average of 6.13.London is home to the biggest insurance market in Europe and fourth biggest market in the world, and is well placed to help India in this area.
How City of London is facilitating green finance in India?
India’s green finance sector is in its infancy but is developing fast. I look forward to exploring where else we can work together during this visit.The UK is a natural partner for India's clean growth ambitions. The UK government has been leading efforts to decarbonise its national and the global economy. And London is the world's leading green financial centre.India’s green infrastructure gap is not closing fast enough. That is why the UK and Indian governments called upon the private sector to set up the UK-India Green Finance Working Group (chaired by Richard Abel, UK Climate Investments)
The group has produced a report on investment into the Indian market and also some recommendations for policy makers and the private sector.The Working Group has made a strong start, setting out clear recommendations for policy makers and market participants to follow in their report Supercharging Green Finance in India.
Now is the time for action. In the coming months, the recommendations must be translated into reality. They must make it easier to mobilise capital to finance India’s transition.
Which sectors UK companies want to invest in India? What they want so that they can investment in India?
We’ve identified a number of areas where the UK and India can work more closely together in innovative financial services- cyber, green and fintech.In fact, our ties are already strong in these areas, and many firms from the UK are already based here. Vice versa many Indian firms are in the UK. After all London’s expertise perfectly matches India’s fast growing market.
We have also been working for many years to further tighten cooperation between our countries in insurance, and to assist in the development of India’ reinsurance market.In addition, India’s Insolvency and Bankruptcy Code has led to greater work between our legal sectors, and with UK investors.
What more you want so that UK companies can invest in India?
We in the City remain confident about India’s long-term economic strengths. I applaud work to boost India’s ease of doing business ranking, and look forward to greater openness and flexibility in the market to allow more foreign firms to contribute to India’s growing economy. The City of London and UK is a great example of what can happen when you truly open yourself up to global talent, and I hope one day we see a similar situation in India.
How Insurtech Industry in London can contribute to the growth of Indian insurance industry?
UK insuretech firms can also support the Indian government’s initiatives, providing digital platforms that can connect micro-insurers, insurers, policyholders, and intermediaries, and increase insurance take up. Previous business delegations travelling to India with my colleague the Lord Mayor of the City of London have included insuretech companies, and I hope many more can come over in the coming years.
What are the segments you think Insurtechs in London , can contribute?
Two examples that come to mind are disaster and climate change insurance and cyber, both of which the City specialises in. We can also assist in making insurance easier and clearer to understand here, with a view to increasing penetration of the market here in India.
Are there any regulatory problems for London Insurtechs to operate in India?
Again, it is a case of market access. I hope going forward, possibly in this year’s union budget, we will see moves to allow more talented foreign firms into India for the benefit of both our countries.