India-Luxembourg hold first summit in two decades; Modi pitches for strengtening of economic relations

India and Luxembourg on Thursday signed three agreements to deepen cooperation in the financial sectors and further vowed to look at new opportunities for expanding trade and business ties as the two countries held a summit after a gap of two decades.

In the virtual summit, Prime Minister Narendra Modi and his counterpart from Luxembourg Xavier Bettel expressed concern over cross-border terrorism and agreed on the need for cooperation between the two countries to support global efforts at the UN and at forums like the Financial Action Task Force (FATF) to combat the menace, according to a joint statement.

The two prime ministers exchanged views on strengthening India-Luxembourg relationship in the post-COVID world, especially in the areas of financial technology, green financing, space applications, digital innovations and start-ups.

The agreements included one between India International Exchange and Luxembourg Stock Exchange that will provide for cooperation in financial services industry. Another pact was signed between the State Bank of India and the Luxembourg Stock Exchange for similar cooperation.

"The two Prime Ministers welcomed the growing economic relationship between the two countries and expressed satisfaction that companies from both India and Luxembourg were expanding their presence in each other's countries. In this context, they agreed to look at new opportunities for business cooperation," the joint statement said.

The issue of long-pending free trade agreement between India and the European Union figured in the talks, a senior official of the Ministry of External Affairs said, adding a high-level mechanism is going to examine the long-pending matter as decided at the India-EU summit.

The joint statement said both sides expressed satisfaction at the successful India-EU virtual summit held in July and expressed support for further intensification of the India-EU relationship, including through strengthening cooperation in areas of common interest in the Indo-Pacific region, and through comprehensive, sustainable and rules-based connectivity.

It said the two leaders reaffirmed their commitment towards widening and deepening the spectrum of bilateral relationship and enhancing consultation and coordination in regional and multilateral fora on matters of mutual and global interest.

"The leaders expressed their determination to promote effective and reformed multilateralism and a rules-based multilateral order with the United Nations (UN) and the World Trade Organisation (WTO) at its core," it said.

"They also affirmed their commitment to cooperate in the implementation of the Sustainable Development Goals and the protection of the environment and combating climate change," the joint statement said.

The two sides expressing strong concern at continuing threats of international terrorism, including cross-border terrorism.

The statement said the two leaders condemned terrorism in all its forms and manifestations and agreed on the need for continued cooperation between India and Luxembourg to support international efforts at the UN and at forums like FATF.

In his opening remarks, Modi pitched for expansion of economic engagement between India and Luxembourg, saying there was huge potential to further ramping it up in a range of areas like financial and digital technologies.

Modi also mentioned about the common values like democracy, rule of law and freedom which have strengthened the bilateral ties.

"There is huge potential to expand economic engagement between the two countries. We have good cooperation in areas like steel, financial technology, digital domain, but there is a massive possibility of taking it forward," Modi said.

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.

Luxembourg is a key country in the European Union (EU) and it is the third largest source of Foreign Portfolio Investments (FPI) investments in India after US and Mauritius accounting for approximately 8.5 per cent of these investments.