Published: 23rd Nov, 2020
India-Luxembourg hold first summit in two decades; pitched for strengthening of cooperation in a range of areas like financial and digital technologies
Context
India-Luxembourg hold first summit in two decades; pitched for strengthening of cooperation in a range of areas like financial and digital technologies
About
Key-highlights of the Summit
- India and Luxembourg, which share diplomatic relations that date back to 1929, hold their first stand-alone Summit.
- Both countries signed 3 major pacts. The three agreements signed included pacts between the
- Luxembourg Stock Exchange with the State Bank of India and
- Luxembourg Stock Exchange and the India International Stock Exchange
- LuxInnovation and Invest India
- India welcomed Luxembourg's announcement to join the International Solar Alliance (ISA).
- The ISA, initiated by India, is an alliance of over 120 countries which is focused on working for efficient consumption of solar energy to reduce dependence on fossil fuels.
- India also invited Luxembourg to join the Coalition for Disaster Resilient Infrastructure (CDRI).
- Both countries are looking to ramp up cooperation in the space sector. Discussions are on for an agreement between the ISRO and the space agency of Luxembourg.
Significance of the signed Agreement
- The agreement will provide for cooperation in the financial services industry. It will enable the maintenance of security markets in both countries with a focus on ESG (environmental, social and governance) and green finance in the local market.
- The agreement with LuxInnovation will support and develop mutual business cooperation between India and Luxembourg companies.
Why Luxembourg is important for India?
- Source of FPI: Luxembourg is a key country in the European Union (EU), and is also the third largest source of FPI in India after US and Mauritius accounting for approximately 8.5 per cent of these investments.
- Steel sector: India and Luxembourg have a longstanding cooperation in the steel sector.
- Luxembourgish company Paul Wurth has been in India for the last two decades and played an important role in upgrading the steel sector in India in collaboration with SAIL, TISCO and Jindal Steel.
- ArcelorMittal, the world’s largest steel-producing company, is based out of Luxembourg and recently entered into a joint-venture in India, partnering with Nippon Steel.
- Important financial centres: Luxembourg is one of the most important financial centres globally. Several Indian companies have raised capital by issuing Global Depositary Receipts (GDRs) at the Luxembourg Stock Exchange.
- Several Luxembourg-based investment funds hold substantial banking and asset management market share in portfolio investments in India.
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