"Both countries agreed to pursue joint work on the common aim of exploring ways to encourage increased institutional investment in infrastructure," Chidambaram said in a joint statement issued with his British counterpart, George Osborne.
"This will include exploring the possibility of establishment of a London listed 'feeder fund' for Indian Infrastructure Debt Funds," he said after the 6th annual India-UK Economic and Financial Dialogue that ended in London on Thursday.
A feeder fund makes most of its investments through a 'master fund'.
It can obtain better trading and operating costs through the master-feeder structure because of economies of scale.
India has set a target of investing $1 trillion by 2017 to bolster its infrastructure.
The statement said that India will actively consider the UK's offer of partnership over the Bengaluru-Mumbai Economic Corridor, and co-financing of a feasibility study.
Besides infrastructure, Chidambaram's meeting with Osborne focused on a range of issues including financial sector reforms, the importance of increasing FDI in Indian insurance sector and support for SMEs with plans to 'work together to promote trade and investment between the SME sectors of the two countries'.
"We agreed on the importance of passing the Indian Insurance Amendment Bill in order to enhance the foreign direct investment limit in insurance companies from 26 per cent to 49 per cent and enable international reinsurers to establish in India," the ministers said.
The two leaders also discussed the importance of the ‘timely conclusion of an ambitious EU-India Free Trade Agreement’.
Chidambaram left for Paris today as part of his three-nation tour which concludes with talks in Qatar on Saturday.
The joint ministerial statement said India and the UK remain committed to ensuring that the international financial reforms agenda stays focused, proportionate and consistent across the global financial system.
"We encourage the G20 to implement, with support from the Financial Stability Board, key reforms already agreed such as Basel III, the G-SIFI framework, and monitoring implementation of over-the-counter derivatives reforms," it said.
The UK lauded RBI's work in developing the ‘roadmap’ for foreign banks in India and its commitment to resolving outstanding issues, including those on subsidiarisation and taxation and also welcomed Indian commitment that ‘subsidiarised banks would receive national treatment’.
The two countries have also agreed to explore the possibilities for enhancing participation of Indian and British firms in each others' capital markets, including discussion on any regulatory barriers.
The senior ministers pledged to work ‘closely together’ through multi-lateral cooperation via the G20 and international financial institutions.
"Today’s dialogue reaffirmed the continued strength of the UK-India economic and financial relationship. Increasing links between our respective government economic services can only further cement that," the statement added.
Both sides agreed to continue to work closely throughout the year, including a mid-year stock take by senior officials, to follow through on commitments.
The next round of talks will be held in 2014 in New Delhi.
Image: P Chidambaram
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