Memorandum submitted by the City of London
Corporation
(Submitted by the Office of the City
Remembrancer)
INTRODUCTION
1. As highlighted in earlier evidence to
the Committee, the City has very considerable trade interests
in this important and developing market. Under the City "brand",
the City of London Corporation seeks to promote and support the
financial services sector in the UK regardless of the relevant
home base of individual institutions, as Ambassador and facilitator
for the industry irrespective of its geographical location in
the UK. As such its promotional activities are not confined to
the "Square Mile" and the surrounding business cluster.
2. The City of London Corporation has long
recognised the critical importance of the India as an emerging
market both to the world economy at large, and to the international
financial services industry which raises the capital, provides
the advice and facilitates the trading on which that economy so
heavily depends. Since the 1990s, visits to India have been a
regular part of the Lord Mayor's annual overseas visits programme.
The current Lord Mayor is visiting the region this month with
a strong business delegation. In further recognition of the scale
of opportunities India presents for the financial and business
related services (FRBS) sector, and following similar engagements
in China, the City Corporation has established a City Office in
Mumbai (Bombay) and an Advisory Council to inform the work of
that Office. This represents a further attempt to deepen the bilateral
relationship in Financial Services.
3. The City of London Corporation welcomes
the opportunity to respond to this follow up inquiry into India
and provide an overview of developments from its perspective since
the Committee's report last year.
CITY OFFICE
IN MUMBAI
4. The City Corporation first discussed
establishing a presence in India early last year. There was strong
support at that time from both the Indian business community and
British High Commission in New Delhi to establish some form of
City Representation in India to mirror that already in place in
China.
5. There was some delay in establishing
physical representation in Mumbai, caused by the lengthy process
of obtaining official permission for the Office from the Reserve
Bank of India. The City Office in Mumbai was however formally
established in January 2007 and works to promote the interests
of the UK-based financial services sector. The overall aim of
the Office is to strengthen trading and investment links in both
directions between India and the UK and, more specifically, promote
awareness of the services of the City to potential customers in
India, as well as other influencers and intermediaries such as
Indian financial institutions, the media and regulatory or trade
bodies. Although funded and managed by the City Corporation, the
Office is very much intended to be a resource for the FBRS sector.
The British Government is strongly supportive of the creation
of the Office, and the Deputy High Commission in Mumbai and High
Commission in Delhi lobbied the Indian government on the City's
behalf, resulting in the approval to open the Office in January
2007 during the visit to India of the Chancellor of the Exchequer.
6. The City Office works to promote the
services of the City to Indian public and private sector customers
including the raising of capital, insurance, asset management,
infrastructure finance and consultancy, London's exchanges, business
education & training and legal & advisory services. Through
this promotional work, the City seeks to facilitate the business
development of the FRBS sector by providing support for visits,
making introductions, and providing briefing material. The Office
also works to identify formal or informal barriers to market access
for financial and related business services, so that action to
overcome them can more readily be taken by the relevant authorities.
Another function of the Office is to promote the UK generally
as a physical location for Indian financial and business related
services; and to target, attract and assist businesses in their
UK establishment. In this regard, the City Office has assisted
major Indian firms such as the General Insurance Corporation of
India with their plans to come to the UK.
7. Funding for the Office has been approved
initially to 2010. The City of London intends to continue to liaise
closely with UK Trade and Investment (both in the UK and at overseas
posts) to ensure that the programme of activities is in line with
the India Financial Services strategy and avoids duplication of
effort.
CITY OF
LONDON ADVISORY
COUNCIL IN
INDIA
8. The work of the City Office in Mumbai
is steered by the City of London Advisory Council for India, (CoLACI),
chaired by Alan Rosling, Executive Director of Tata Sons Ltd.
The Advisory Council, formally launched in February 2007, comprises
senior and influential Indian business figures including the Chairman
of Reliance, the Chief Executive of ICICI Bank, the Chief Executive
of HSBC Securities and Capital Markets, the Senior Partner of
AZB & Partners, the Chairman of Development Credit Bank and
the Chairman of the HDFC Group. The Chairman of the City Corporation's
Policy and Resources Committee, Michael Snyder, represents the
City Corporation on the Council, and the British Deputy High Commissioner
also attends as an ex-officio member.
9. The first City of London Advisory Council
for India meeting was held in Mumbai in February 2007. The next
meeting is scheduled for London in July.
10. Following the first meeting of the Advisory
Council, it was agreed that the City of London should initially
focus its efforts in three main areas in support of Mumbai's aspiration
to be a regional financial centre, and for the benefit of the
Indian economy in general. These included the development of the
public/private partnership (PPP) model for infrastructure development,
improving access to capital, including through the Alternative
Investment Market (AIM), and assisting in the development of a
corporate debt market. The Council also endorsed a proposal to
develop a programme for the "rising stars" of the Indian
financial services industry, along the lines of the programme
operated by the City Corporation for new EU Member States[25].
11. The overall conclusion was that the
City of London, and more generally, UK-based financial services
were well placed to assist with the development of the financial
services sector to the benefit of the Indian economy. In particular
it was felt that the City of London's unique status enabled it
to operate as a facilitator, for example with State Governments
as well the central authorities, and business practitioners.
12. The establishment of the City Office
and the launch of the Advisory Council have attracted significant
media and business attention. There is the recognition in India
that for Mumbai to be credible as a regional financial centre
it had to overcome the challenge currently posed by Dubai. The
successful visit by the Lord Mayor last year, by the City Corporation's
Chairman of Policy and Resources in February this year, and preparation
for the visit of the Lord Mayor this month have all provided strong
momentum and priorities for the City Office's work. It is the
City's intention that through discussion in the Advisory Council,
the work of the Office will respond directly to the priorities
of the business community, and matters of concern raised by them,
to the benefit of both India and the UK. In this context, the
City intends to commission research into a particular area of
the Indian market later this year in response to points raised
in the first Advisory Council meeting and a seminar on Public
Private Partnerships will form a key part of the Lord Mayor's
programme for India.
CO -OPERATION
AND JOINT WORKING
13. The Advisory Council has approved the
City of London Action Plan for India which seeks to complement
the work of the Government's Financial Services Sector Advisory
Board (FSSAB). The FSSAB works alongside the Chancellor's High
Level City Group and, like the High Level Group, includes City
Corporation representation. The City works closely with the Government
on the FSSAB and contributed to the development of the UK India
Financial Services Strategy which draws on research commissioned
by the City Corporation on future scenarios for India and China[26].
It is acknowledged that that any initiative undertaken by the
City Office needs to be coordinated with other interested parties,
notably the Indo British Partnership Network, and UK Trade and
Investment financial services sector and South Asia teams in London.
The City also keeps abreast of any developments arising from the
Joint Economic and Trade Committee (JETCO), and seeks to offer
assistance wherever possible. This has included, for example,
facilitating access to large Indian businesses represented on
the Advisory Council and building JETCO outcomes into briefings
for City Corporation outward visits.
14. Together with the representation of
the Deputy High Commissioner on the Advisory Council, this demonstrates
the concerted effort of the City and Government to provide a more
co-ordinated approach to India as an important emerging market.
This is further illustrated through thorough consultation with
the Government, through UK Trade and Investment and the Foreign
and Commonwealth Office, ahead of any visit by either the Lord
Mayor or Chairman of Policy. Similarly the City provided briefing
material ahead of visits by the Chancellor and Secretary of State
for Trade and Industry earlier this year. The City also coordinates
with the other agencies involved in promoting trade and investment
between UK and India including the London Development Agency,
Think London and the Indo British Partnership Network, senior
members of which are accompanying the Lord Mayor on his visit
this month.
GENERAL POINTS
15. Following the first meeting of the Advisory
Council, the City Corporation has sought to facilitate further
discussions with City stakeholders on their perception of India.
One concern raised was that, with the possible exception of the
London School of Economics and a small number of other institutions,
UK University penetration of the Indian market has fallen with
the United States now leading the market and Australia had overtaken
the UK as the second most popular destination for students. A
recent study of US perceptions had shown that India was the only
country where the impact of US policy over the past five years
had little impact on the perception of the US, and hence its attraction
as a place to visit and study. It was suggested that visas, and
the inability of individuals to work after graduation, acted as
barriers to UK university penetration.
May 2007
25 The programme is run by the City Corporation's Economic
Development Office for the New Member States and Accession countries
and is aimed at practitioners, government officials and regulators.
The aim of the programme is to promote the UK financial services
industry, share best practice in regulation and related matters
and build personal and corporate links between the City and figures
of influence in the particular country. The Programme centres
around a 5-day tailor-made City course followed by a work placement
in a firm or institution for 9 weeks. The placement offers an
ideal chance for the participants to gain insight into City practice
while creating and maintaining helpful relationships with City
institutions. Back
26
"Scenarios for India and China 2015: Implications for the
City of London", SAMI Consulting and Oxford Analytica, published
by the City of London Corporation, October 2006. Back
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