India has invited UK companies to invest in the insurance sector, while Britain offered its London market for direct listing of Indian firms. This year India has increased the foreign direct investment ceiling in insurance from 49 per cent to 74 per cent.

Earlier, the government had allowed firms to list overseas without simultaneous listing at the domestic market.

To deepen bilateral ties in the financial sector, the first meeting of India-UK Financial Markets Dialogue was held on Thursday late evening, a finance ministry statement said, adding the dialogue was established at the 10th Economic and Financial Dialogue (EFD) in October 2020.The government-to-government discussion focused on four themes GIFT (Gujarat International Finance TecCity) City, India's flagship international financial centre, banking and payments, insurance, and capital markets, it added.

Following the government-to-government discussion, private sector partners were invited to the discussion, the statement said.

At the meeting, Indian and UK participants discussed matters relating to the insurance sector, including domestic updates on the impact of Covid19, opportunities to encourage UK investment in the Indian market, and the UK Solvency II Call for Evidence.

Participants also took stock of capital markets cooperation, it said, adding the UK outlined progress on regulatory reforms, including through the Wholesale Markets Review and the Lord Hill Listings Review.

There was also a productive discussion on opportunities for increased cross-border activity, including an update from India on the implementation of the direct listing policy, according to the statement.

Both sides agreed that there is significant scope for strengthening financial services cooperation between India and the UK, it said.

"Both sides agreed to continue to engage bilaterally on these areas in the coming months, in the runup to the next EFD and the beginning of negotiations for a future India-UK FTA, both expected to take place later this year," it said.

The statement said participants provided updates on their respective banking and payments landscapes, to increase cross-border activity in this area. The Bank of England discussed its work on cyber resilience and both sides also recognised the key role the banking sector has played in maintaining stability during the Covid-19 pandemic.

The dialogue was led by senior officials from the finance ministry and UK Treasury, with participation from Indian and UK independent regulatory agencies, including the Reserve Bank of India, the Securities and Exchange Board of India, International Financial Services Centre Authority, the Insurance Regulatory and Development Authority of India, the Bank of England, and the Financial Conduct Authority-Nirmals on tax-Finance Minister Nirmala Sitharaman on Friday said the country has taken fiscal policy measures to get better environmental outcomes.

In her address at the G20 High-Level Tax Symposium on Tax Policy and Climate Change, ahead of the third G20 Finance Ministers & Central Bank Governors Meeting, she also said that concessional tax rates are in place in India to promote use of renewables.

In a series of tweets, the Ministry of Finance said that the minister shared India's innovative policy mix for better environmental outcomes such as new energy map of India, digital innovation and emerging fuels, international solar alliance for enabling clean energy, and promotion of energy efficiency and afforestation.

The third meeting of G20 Finance Ministers and Central Bank Governors is scheduled on July 9 and 10, under the Italian G20 presidency.

Arpita Mukherjee of Icrier said: “A number of countries, including many EU members, and India are net importers of digital goods and services and they need to work together to have a common view. There is a need to collect data on digitalisation in the country to have data driven policies. As India will take up G20 Presidency in 2023 this areas will need consultations with experts and industry.”

Ajay Rotti, partner, Dhruva Advisors LLP, said: “What is important for India is the allocation of profits to market jurisdictions. Indian has clearly stated that the issue remains open and needs to be addressed. It is this aspect on which India intends to remain ‘constructively engaged’ and seek a ‘meaningful and sustainable’ revenue allocation in its own words.”

The finance ministry has said it would push for allocation of meaningful and sustainable revenue to market jurisdictions, particularly for developing and emerging economies as it joins OECD backed minimum global corporate tax regime.

There are subtle differences between the G7 proposal and the one proposed by OECD. Under the G7 agreement — market countries will be awarded taxing rights on at least 20% of profit exceeding a 10% margin. Under the OECD/G20 Pillar One: between 2030% of residual profit defined as profit in excess of 10% of revenue will be allocated to market jurisdictions with nexus using a revenue-based allocation key. The proposed solution consists of two components Pillar One, which is about reallocation of additional share of profit to the market jurisdictions and Pillar Two consisting of minimum tax and subject to tax rules.