NIIF paves way for boosting India-UK economic ties
London : The National Investment and Infrastructure Fund (NIIF) set up recently under Finance Minister Arun Jaitley’s vigil, would now enable strengthening of investments from UK and help in fueling growth story of India from trade, market and infrastructure mode of drivers. NIIF is meant to fund development of infrastructure projects, including reviving stalled ones, for which, the government is ready to invest Rs 20,000 crore into the NIIF from the Budget, with another Rs 20,000 crore expected to come from private investors. The government’s share of the NIIF’s corpus is envisaged to be under 50%.
India and UK have agreed to open up trade and markets to support growth, carry out structural reforms and address issues related to cross-border tax evasion. this was revealed during discussion between Finance Minister Arun Jaitley and UK Chancellor of the Exchequer George Osborne in London, during which, both nations agreed to boost economic ties particularly in areas of infrastructure and financial services and renewed pledge for autonomical exchange of tax information from 2017.
Post talks, FinMin Jaitley revealed — From the Indian point of view, we were extremely interested in having the British investors look at infrastructure investments in India for which various possibilities were discussed. India is extremely keen that large British companies, particularly involved in infrastructure financing, start investing in Indian infrastructure….The possibility of their investing, either directly in projects or through the National Investment and Infrastructure Fund (NIIF) that we have created, were both discussed.
Both countries inked the agreement on strengthening Indo-UK ties and released a joint statement on Wednesday. The two nations have agreed to work together for developing an India-UK partnership fund under the umbrella of National Investment and Infrastructure Fund (NIIF) recently created in India.
The joint statement highlights were — This fund will seek to increase flows of private sector capital and expertise alongside multilateral support into Indian infrastructure…..In this regard we stand ready to take the necessary steps to open up trade and markets to support growth and jobs, and agree on the importance of structural reforms and pursuing credible fiscal policies.
UK will focus on development of smart cities in India. New Delhi is also looking at London for issuance of rupee-denominated bonds to get UK investors to fund its infrastructure projects. With the IMF warning of global economy being close to recession with 3.4 per cent growth this year, the two sides said they ‘remain concerned that global growth is falling short of expectations and that the risks to the global outlook have increased’.
The NIIF could provide equity support to stuck infrastructure projects, giving other foreign funds comfort to take them over. Large greenfield projects could also be taken up by the fund in various sectors.