India offers a compelling growth opportunity for foreign banks: FM Sitharaman

New Delhi: India offers a compelling growth opportunity for foreign banks and the government is actively encouraging foreign investment in the banking sector, Union Finance Minister Nirmala Sitharaman has stressed.

Addressing the India-UK Investor Roundtable discussion in London with around 60 investors, representing various pension funds, insurance companies, banks and other financial institutions in London, the Union Minister outlined priorities of the government for enabling sustained economic growth and investment opportunities with the policy support that is shaping New India.

She highlighted the efforts being made by the government to pursue process and governance reforms to reduce compliance burden and ease regulation for facilitating an enabling environment for business and investments, according to a Finance Ministry statement on Wednesday.

With expanding middle class, and strong and stable policy environment, the Union Finance Minister said that India is set to become the sixth largest Insurance market by 2032 with the expected growth at 7.1 per cent CAGR from 2024-2028 — one of the fastest growing insurance market among G20 countries.

FM Sitharaman informed the investors that the Indian securities market is among the first major markets to fully adopt “T+1 settlement” — as early as in 2023 — and India’s market capitalisation stands at $4.6 trillion (3.7 trillion GBP), currently ranked fourth globally.

The Union Finance Minister spoke at length about India’s maiden International Financial Services Centre GIFT-IFSC — an offshore zone that is endowed with an enabling ecosystem with considerable tax exemptions, skilled manpower, foreign currency transactions, and strategic geographical location.

She further informed the investors that as of March 2025, more than 800 entities across banks, capital markets, insurance, FinTech, aircraft leasing, ship leasing, bullion exchange, among others have been registered with the International Financial Services Centres Authority (IFSCA).

Underlining India’s digital economy as a significant contributor to its economic growth, accounting for 11.74 per cent of the GDP in 2022-23, the Finance Minister informed the participants that India stands third globally in terms of the number of homegrown unicorns.

She further stated that India is home to leading FinTech ecosystem, driven by a large tech-savvy population, supportive government policies, and innovative startup ecosystem.

The sector has witnessed rapid surge in FinTechs over the last 5 years as is evident from an astounding 87 per cent adoption rate against global average of 64 per cent and 15 per cent share of global FinTech funding.

The Union Minister also participated in a fireside chat on the ‘Opportunities and challenges for India’s quest to become a developed economy by 2047’, at the India House in London.

—IANS