India and the United Kingdom have reaffirmed their commitment to strengthening bilateral ties, with a focus on progressing negotiations toward a Free Trade Agreement (FTA) and Bilateral Investment Treaty (BIT). The announcement came during the 13th Economic and Financial Dialogue, held in London and co-chaired by Indian Finance Minister Nirmala Sitharaman and UK Chancellor of the Exchequer Rachel Reeves.

The UK shared details of its forthcoming Industrial Strategy, noting areas of potential collaboration with India in sectors like advanced manufacturing, life sciences, clean energy, financial services, and the creative industries. The two nations aim to align UK expertise with India’s growing role as a global manufacturing hub.

A key development discussed was the upcoming signing of the ‘India-UK Defence Industrial Roadmap’, aimed at strengthening cooperation between the countries’ defence industries and improving supply chain resilience.

Both sides acknowledged the growing trade in financial services and committed to enhancing this further. The Financial Markets Dialogue (FMD) held in GIFT City IFSC in December 2024 served as a platform to deepen collaboration across banking, insurance, pensions, capital markets, and sustainable finance. The next FMD is scheduled to take place in London later this year.

The UK welcomed regulatory steps taken by India, such as allowing insurance companies in GIFT IFSC to invest overseas and considering similar provisions for pension funds. The two sides also highlighted the role of UK bond markets in supporting Indian firms, particularly through rupee-denominated Masala Bonds, and pledged to create a more supportive policy environment for capital-raising.

They further discussed the growing internationalisation of the Indian rupee, with India allowing the opening of rupee accounts in overseas markets. London’s role as a global financial hub was identified as a key enabler in this initiative.

Additionally, both countries expressed interest in using the UK asset management sector to support the UK-India Infrastructure Financing Bridge, offering Indian investors better access to global funds.

The dialogue also included a joint commitment to transition finance to mobilise capital for sustainable development. Both sides praised each other’s efforts in this area, including the UK’s government-commissioned Transition Finance Market Review.

“Our shared ambition is to ensure economic stability, enhance investment, and reform our economies to boost growth and prosperity. With bilateral trade exceeding £40 billion and significant foreign direct investments in both directions, the India-UK economic partnership remains strong,” the joint statement concluded.