The proceeds of the bond will be used to drive investment in Indian infrastructure.

"A key part of our long term economic plan is to cement Britain's position as the global financial centre. That's why I'm delighted that the International Finance Corporation has started its new $2-billion offshore rupee programme by issuing this historic bond in London," said economic secretary to the Treasury Andrea Leadsom.

"This is an important step in strengthening the economic and financial ties that exist between the UK and India, and is exactly the sort of development that I had in mind when I launched the UK India Financial Partnership in Mumbai," she added.

The UK government feels that the IFC's decision to issue this bond in London represents a huge vote of confidence in Britain's strengths as an international financial hub.

In July this year, UK Chancellor George Osborne and Indian finance minister Arun Jaitley met in New Delhi for the seventh UK-India Economic and Financial Dialogue and agreed to deepen collaboration on financial services and infrastructure.

Following these talks, Leadsom had announced the launch of the India-UK Financial Partnership last month.

The partnership is an industry-led coalition that is focussed on promoting trade and investment between the UK and India in financial services.

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