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New report outlines how to deepen UK-India capital market links

by LLB Editor
1st Jul 21 12:03 pm

A new report released today calls for the development of a deep, liquid corporate bond market in India to fund the country’s large infrastructure investment needs and its transition to a low carbon economy.

Unleashing the potential of the Indian Debt Capital Markets is the first report by the City of London Corporation led UK-India Capital Markets Working Group, which was welcomed by India and the UK during the India-UK Economic Financial Dialogue 2020.

The publication, put together in partnership with law firm DLA Piper, will be launched at an online event during a virtual visit to India this week by the City of London Corporation Policy Chair Catherine McGuinness.

The report provides 15 key recommendations to increase the depth of the bond market in India as well as making it easier for Indian companies to issue bonds overseas.

It provides a roadmap for deepening the domestic and offshore corporate bond market for India in a post- pandemic world, as well as transforming it into a competitive source of financing for issuers, and an attractive investment for a wide range of investors.

The recommendations cover improving the efficiency of the primary markets, deepening liquidity in secondary markets, developing the ecosystem of products, and targeted tax, regulatory and reporting interventions to help address issues faced by issuers and investors in accessing domestic and international debt capital markets.

The report follows publication earlier this year by the UK and Indian governments of an Enhanced Trade Partnership and India-UK Roadmap to 2030, which contained a range of objectives covering financial and professional services, including boosting cooperation in green finance to help drive forward clean, sustainable infrastructure projects in India.

City of London Corporation Policy Chair Catherine McGuinness said: “If implemented, these recommendations could help fund India’s infrastructure investment needs and enhance its journey to a low carbon economy.

“Growing liquidity, accessing capital at reasonable cost, developing the corporate bond market, and adopting global best practice are all part of that plan.

“India’s capital markets have enormous potential to attract capital, and the UK provides access to a large and diversified global capital pool, as shown by the successful issuance of Masala bonds in London.

“I therefore hope these recommendations are taken forward, and look forward to speaking to government and industry figures in the UK and India to explore next steps.”

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