India Offers A Compelling Growth Opportunity For Foreign Banks: FM Sitharaman
Union Finance Minister Nirmala Sitharaman has highlighted India as a compelling destination for foreign banks and financial institutions, underlining the government’s active encouragement of foreign investment in the country’s rapidly expanding banking and financial sector.
Speaking on Tuesday at the India-UK Investor Roundtable in London, which brought together around 60 representatives from pension funds, insurance firms, banks, and other financial institutions, the Minister outlined the government’s policy priorities aimed at sustaining economic growth and fostering a robust investment ecosystem in “New India.”
According to a statement from the Ministry of Finance, Sitharaman emphasized the ongoing reforms in governance and regulation, designed to reduce compliance burdens and create a more conducive business environment. “We are making conscious efforts to ensure that policy stability and regulatory simplification go hand in hand,” she said.
With a growing middle class and a stable macroeconomic landscape, the Finance Minister said India is on track to become the world’s sixth-largest insurance market by 2032, projecting a compound annual growth rate of 7.1 percent from 2024 to 2028 — one of the fastest rates among G20 economies.
Sitharaman also highlighted India’s rapid financial market development, noting that the Indian securities market became one of the first major markets to fully adopt the “T+1” settlement system as early as 2023. She informed investors that India’s current market capitalisation stands at $4.6 trillion (approximately 3.7 trillion GBP), ranking it fourth globally.
Discussing India’s International Financial Services Centre — GIFT IFSC — she described it as a game-changing offshore zone that offers global investors tax exemptions, skilled manpower, foreign currency transaction facilities, and a strategic location. As of March 2025, over 800 entities across banking, capital markets, insurance, fintech, aircraft and ship leasing, and bullion exchange have registered with the International Financial Services Centres Authority (IFSCA).
The Minister also highlighted India’s digital economy, which contributed 11.74 percent to the GDP in 2022–23. She noted that India ranks third globally in terms of the number of homegrown unicorns, driven by a dynamic fintech ecosystem supported by a tech-savvy population and progressive government policies. “Our fintech adoption rate is an impressive 87 percent, compared to the global average of 64 percent,” she pointed out, adding that India commands a 15 percent share in global fintech funding.
Later, Sitharaman also participated in a fireside chat hosted at India House in London, focusing on the theme: Opportunities and Challenges in India’s Quest to Become a Developed Economy by 2047. The discussion further underscored India’s determination to maintain its reform-oriented, inclusive growth trajectory in the years to come.
