Trade between India and the UK has the potential to grow enormously, benefiting consumers, businesses and governments in both nations; given the thriving state of the domestic FinTech industries in both countries, but low levels of trade in in FinTech and FinTech -enabled services, enhancing trade in this area is a particularly promising avenue for strengthening bilateral trade in goods and services between the two countries.
Financial services in general, and financial technologies (FinTech) in particular, are important industries in both India and the UK. FinTech is an emerging technology area and there is no universally agreed definition for it (Schueffel 2016). PwC defines FinTech as “a dynamic segment at the intersection of the financial services and technology sectors where technology-focused start-ups and new market entrants innovate the products and services currently provided by the traditional financial services industry” (PwC 2016, 3). Whether it is via the attention being given to attempts to provide banking services to previously ‘unbanked’ people, the growth of mobile devices and services, or the emergence of new technological stacks like crypto/blockchain, FinTech has been viewed by many as a new technology sub-sector that will have transformative implications for traditional value chains and people’s lives. The UK is currently the world’s second-largest exporter of financial services (after the USA), and the largest net exporter, with a 2017 trade surplus of £60.9 billion for financial services, rising to £75.1 billion if related professional services are included (Bardalai 2019; TheCityUK 2019).
The UK and Indian governments have emphasised financial services, trade, and technology as central to efforts to strengthen UK-India trade relations (Department for Digital, Culture, Media & Sport et al.2019). ONS statistics (combining the ‘Insurance and Pension’ and ‘Financial services’ classifications)show that UK exports to India of £319 million and imports from India of £152 million in 2018 (Office for National Statistics 2019 table 9.13). The UK issues more skilled worker visas to Indian nationals than to the rest of the world combined (Grant Thornton and Confederation of Indian Industry 2019, 18). Whilst 35% of the fastest-growing Indian-owned firms in the UK are in classified as being in the technology and telecoms sector, only 5% of them are in financial services (Grant Thornton and Confederation of Indian Industry 2019, 11).