India's financial sector is undergoing rapid expansion, with both strong growth of existing financial services firms and new entities entering the market. The sector comprises of commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities. The Indian Government has liberalised the sector in recent years. The Insurance Laws (Amendment) act, which includes a key provision allowing foreign investors to increase stakes in local insurers from 49% to 74%, was passed in April 2021. Foreign Investments are to be allowed in Alternative Investment Funds. The distinction between different types of investment (I.e., Foreign Portfolio Investments and Foreign Direct Investment) is to be replaced with composite caps which will create headroom and flexibility for overseas investors. The UK is a world leader in the financial and professional services sector. In 2021, the UK’s financial and related professional services generated an annual trade surplus of £77.9 billion and was the second largest investment hub in the world. The UK government is committed to attracting continued investment, increasing opportunities for cross-border trade and promoting international standard setting. In 2021 the government announced “A new chapter for financial services”, announcing its vision for a globally competitive “open, green, and technologically advanced financial services sector.” Together, the UK and India are party to the UK-India Economic and Financial Dialogue. The most recent of which, in 2021 (the 11th iteration), saw ambitious agreements on tackling climate change and boosting investment through economic cooperation, financial services and trade.

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