April 2019 \ Cover Story \

India and Luxembourg can look back with pride ...

  • ©LuxembourgforFinance

India and Luxembourg can look back with pride on years of excellent economic and trade relations. In order to strengthen these further, the Grand Duchy of Luxembourg has been working to become India’s main partner in international finance. The Grand Duchy, which has a well-established reputation in Asia as a member of the Asian Infrastructure Investment Bank (AIIB) and as the European headquarter of numerous Japanese and Chinese banks, is keen to develop the enormous potential available in partnering with the Indian financial sector.

An important milestone was the first listing of a Masala bond on the Luxembourg Stock Exchange (LuxSE) in 2008. It was the first ever listing of such a security in Luxembourg and the number of INR-denominated debt securities has gradually increased ever since. Today, important names such as the Asian Development Bank, the International Bank for Reconstruction and Development and J.P. Morgan have raised capital using Luxembourg-listed Masala bonds.

As implied above, the capital needed to finance India’s sustainability strategy is not only available via bond-listings, but also through the establishment of overseas investment funds. Luxembourg, as the second largest investment fund centre in the world, has the necessary cross-border expertise for asset managers to set up funds with different international investment strategies and raise capital for them from investors all over the world. Today, there are some 52 funds in Luxembourg investing almost USD 28 billion through a dedicated Indian investment strategy, managed by names such as Goldman Sachs, Aberdeen Standard and Morgan Stanley. Many other funds have a smaller exposure to India for diversification purposes; If we were to consider these as well, the total value invested in the country would rise even further.