UK's Chancellor of the Exchequer Rishi Sunak

London: Finance Minister Nirmala Sitharaman and UK Chancellor Rishi Sunak announced new steps to boost investment and tackle climate change at the 11th Economic and Financial Dialogue (EFD) between the UK and India held on Thursday.

The UK government announced a USD 1.2 billion package for public and private investment in green projects and renewable energy, and the launch of the Climate Finance Leadership Initiative (CFLI) India partnership, the official statement said on Thursday.

The investments will support India's target of 450GW renewable energy by 2030.

At EFD, Sitharaman and Rishi Sunak also agreed to be ambitious when considering services in the upcoming UK-India trade negotiations, which could open up new opportunities for UK financial firms and help more Indian companies to access finance in London. Services account for 71% of UK GDP, and 54% of Indian GDP, the press release added.

UK Chancellor of the Exchequer Rishi Sunak, said, "The UK and India already have strong ties, and today we've made important new agreements to boost our relationship and deliver for both our countries. Supporting India's green growth is a shared priority so I'm pleased that we've announced a USD 1.2 billion investment package, and launched the new CFLI India partnership to boost investment in sustainable projects in India as the UK gears up to host COP26. With trade negotiations also coming up, our agreement to be ambitious when considering services will create new opportunities in both markets, supporting jobs and investment in the UK and India."

The UK-India economic relationship is already strong with bilateral trade of over £18bn in 2020, supporting nearly half a million jobs in each other's economies.

British High Commissioner to India Alex Ellis said, "The economic and financial dialogue between Finance Ministers is another step towards realising the ambition agreed between Prime Ministers Johnson and PM Modi in the 2030 bilateral roadmap, especially with the COP26 climate conference starting in Glasgow in two months to tackle climate change. Today's discussions and agreements show what closer economic and financial ties between the UK and India can offer."

The dialogue agreed upon a $1bn investment from CDC, the UK's development finance institution in green projects in India between 2022-2026. It builds on CDC's USD 1.99 billion existing portfolios of private sector investments in India, the press release said.

The UK also welcomed India's recent decision to lift the Foreign Direct Investment cap in the insurance sector from 49% to 74% which will help British firms to take greater ownership of their operations in India.

New cooperation under the UK-India Infrastructure Partnership with the UK's Infrastructure Projects Authority was agreed to support India's ambitious National Infrastructure Pipeline project.

Earlier this year, Prime Minister Narendra Modi and his British counterpart Boris Johnson launched the UK-India 2030 Roadmap to bring the economies and people closer together over the next decade and boost cooperation in areas that matter to both countries. The countries have also set out an ambitious goal to double trade by 2030, including through negotiating a Free Trade Agreement.