Skip to content
Search

Latest Stories

Comment: BRITAIN AND INDIA’S FINANCIAL RELATIONSHIP CAN FLOURISH

by NIKHIL RATHI

CEO, London Stock Exchange plc


EIGHTEEN months ago I was at Wembley Stadium, among a crowd of 60,000 Indian diaspora, watching prime minister Narendra Modi hail the “special relationship” between India and the UK.

Talking about his plans to develop India into an economic superpower, he was clear: “India is capable of fulfilling these dreams.”

And it is easy to understand why. India is the fastest growing major economy in the world and has embarked on a massive programme of economic and structural reform to drive sustainable economic growth.

As a result, there is a pressing need to drive hundreds of billions of dollars of international investment and capital to India to finance this growth transformation, particularly in infrastructure. This is where the India/UK “Special Relationship” comes in.

London is the world’s most international financial centre. It’s unique qualities: a globally trusted regulatory and legal framework, the most internationally diverse, deep and liquid pool of capital, and a proven ability to constantly be at the forefront of financial innovation have made London the ideal gateway for international investors attracted to India’s growth story.

These investors will be so crucial to financing India’s economic and infrastructure growth.

For example, just last week we were honoured to welcome India’s minister of state for power, coal and renewable energy, Shri Piyush Goyal, to open the London market and celebrate the opening of our new International Securities Market (ISM). Targeted at institutional and professional investors from around the world, this market for primary debt issuance will grant issuers access to one of the deepest pools of global capital. The first bond to list on ISM was by India’s largest energy conglomerate, NTPC, raising nearly INR 20 billion ($310 million equivalent).

The day before, the honourable Indian minister for road transport & highways and shipping, Nitin Jairam Gadkari, opened London’s markets to celebrate the decision by the National Highways Authority of India to choose London to list its first global offshore masala bond, raising Rs 30bn ($470m).

With 40 per cent of investors coming from outside Asia, this shows that as well as Asian investors preferring to seek investment through London, India is attracting global investors too.

This will support the largest roadbuilding programme in the world, attracting world leading companies in engineering and construction, and highlighting India’s ability to operate on a truly global scale.

And last July India’s largest private sector financial services conglomerate, HDFC, raised $450m in London through a masala bond. Their chairman, Deepak Parekh, said they had looked at markets around the world but London “distinguished itself by offering a wide range of financial instruments that enjoys unshakable trust from international investors”. They have been back to our market three times, most recently in March 2017, raising Rs 33bn ($500m), through the world’s largest corporate masala bond.

In fact London is the leading international market for so-called “masala bonds” - offshore rupee-denominated debt, which allows Indian companies to raise money internationally without foreign exchange risk. Since the first one was launched in 2007, London Stock Exchange has raised over $5bn for supranational, municipal and private company institutions on its markets.

The first ever green masala bond was issued in London, while last year the IFC launched a 15-year masala bond in London demonstrating long term confidence in the Indian rupee.

Recently the UK also became the largest G20 investor in India and we are committed to building on this position, working to support future issuance through our innovative capital markets.

It is not just raising capital where our two great countries are working together however. We are also ensuring investors have the data and analytics to make informed decisions. For example, the State Bank of India is working in partnership with FTSE Russell, part of London Stock Exchange Group and a global leader in indices, to develop a new Indian fixed income index and launch an investment product based on it in India.

Indices like these are fundamental to building investment in India, creating deeper pools of international liquidity and a credible global benchmark to guide investment and support the crucial secondary market. It is effective and constant innovation like this that will keep driving global investment in Indian growth as part of the UK-India financial partnership.

As well as our historic expertise in infrastructure finance, we are confident our global leadership in sustainable development, smart cities and fintech will support India’s economic transformation even further. The last twelve months has seen major economic and geo-political turbulence with some predicting that London’s ability to finance global growth would be diminished as a result of the UK’s vote to leave the EU.

But it is not working out that way. As throughout our 300 year history we have remained focused on our core mission of supporting and financing global economic growth. With record trading volumes in recent months our markets have remained resilient and open to investors from around the world.

The recently appointed Indian high commissioner to the UK, YK Sinha, has said Brexit will present both challenges and opportunities. As India continues to go from strength to strength, London is showing it can rise to the challenge and prepared to make the most of the opportunities.

More For You

Will government inaction on science, trade & innovation cost the UK its economic future?

The life sciences and science tech sectors more widely continue to see out migration of companies

iStock

Will government inaction on science, trade & innovation cost the UK its economic future?

Dr Nik Kotecha OBE

As the government wrestles with market backlash and deep business concern from early economic decisions, the layers of economic complexity are building.

The Independent reported earlier in January on the government watchdog’s own assessment of the cost of Brexit - something which is still being fully weighed up, but their estimates show that “the economy will take a 15 per cent hit to trade in the long term”. Bloomberg Economics valued the impact to date (in 2023) at £100bn in lost output each year - values and impact which must be read alongside the now over-reported and repetitively stated “black hole” in government finances, being used to rationalise decisions which are already proving damaging.

Keep ReadingShow less
Deep love for laughter

Pooja K

Deep love for laughter

Pooja K

MY JOURNEY with comedy has been deeply intertwined with personal growth, grief, and selfdiscovery. It stems from learning acceptance and gradually rebuilding the self-confidence I had completely lost over the last few years.

After the sudden and tragic loss of my father to Covid, I was overwhelmed with grief and depression. I had just finished recording a video for my YouTube channel when I received the devastating news. That video was part of a comedy series about how people were coping with lockdown in different ways.

Keep ReadingShow less
UK riots

Last summer’s riots demonstrated how misinformation and inflammatory rhetoric, ignited by a tiny minority of extremists, can lead to violence on our streets

Getty Images

‘Events in 2024 have shown that social cohesion cannot be an afterthought’

THE past year was marked by significant global events, and the death and devastation in Ukraine, the Middle East and Sudan – with diplomatic efforts failing to achieve peace – have tested our values.

The involvement of major powers in proxy wars and rising social and economic inequalities have deepened divisions and prolonged suffering, with many losing belief in humanity. The rapid social and political shifts – home and abroad – will continue to challenge our values and resilience in 2025 and beyond.

Keep ReadingShow less
Values, inner apartheid, and diet

The author at Mandela-Gandhi Exhibition, Constitution Hill, Johannesburg, South Africa (December 2024)

Values, inner apartheid, and diet

Dr. Prabodh Mistry

In the UK, local governments have declared a Climate Emergency, but I struggle to see any tangible changes made to address it. Our daily routines remain unchanged, with roads and shops as crowded as ever, and life carrying on as normal with running water and continuous power in our homes. All comforts remain at our fingertips, and more are continually added. If anything, the increasing abundance of comfort is dulling our lives by disconnecting us from nature and meaningful living.

I have just spent a month in South Africa, visiting places where Mahatma Gandhi and Nelson Mandela lived, including the jails. They both fought against the Apartheid laws imposed by the white ruling community. However, no oppressor ever grants freedom to the oppressed unless the latter rises to challenge the status quo. This was true in South Africa, just as it was in India. Mahatma Gandhi united the people of India to resist British rule for many years, but it was the threat posed by the Indian army, returning from the Second World War and inspired by the leadership of Subhas Chandra Bose, that ultimately won independence. In South Africa, the threat of violence led by Nelson Mandela officially ended Apartheid in April 1994, when Mandela was sworn in as the country’s first Black president.

Keep ReadingShow less
Singh and Carter were empathic
leaders as well as great humanists’

File photograph of former US president Jimmy Carter with Indian prime minister Manmohan Singh in New Delhi, on October 27, 2006

Singh and Carter were empathic leaders as well as great humanists’

Dinesh Sharma

THE world lost two remarkable leaders last month – the 13th prime minister of India, Dr Manmohan Singh, (September 26, 1932-December 26, 2024).and the 39th president of the US, Jimmy Carter (October 1, 1924-December 29, 2024).

We are all mourning their loss in our hearts and minds. Certainly, those of us who still see the world through John Lennon’s rose-coloured glasses will know this marks the end of an era in global politics. Imagine all the people; /Livin’ life in peace; /You may say I’m a dreamer; / But I’m not the only one; /I hope someday you’ll join us;/ And the world will be as one (Imagine, John Lennon, 1971) Both Singh and Carter were authentic leaders and great humanists. While Carter was left of Singh in policy, they were both liberals – Singh was a centrist technocrat with policies that uplifted the poor. They were good and decent human beings, because they upheld a view of human nature that is essentially good, civil, and always thinking of others even in the middle of bitter political rivalries, qualities we need in leaders today as our world seems increasingly fractious, self-absorbed and devolving. Experts claim authentic leadership is driven by:

Keep ReadingShow less