Jaitley and the UK Chancellor of the Exchequor also agreed to collaborate on developing India's corporate bond market and to exchange tax related information automatically from 2017.
The proposed line of credit is from UK Export Finance (UKEF) to support Indian infrastructure projects such as the Bengaluru-Mumbai Economic Corridor (BMEC), said the statement.
Also, 10 global banks are in discussions with UKEF to deliver government funded loans through a 3bn direct lending scheme, with more banks expected to join them in the coming weeks. This will provide competitive finance to purchasers of UK exports in India, said the statement.
Also, design of a London based infrastructure debt fund that would invest in India's infrastructure projects is also on the cards.
Both the finance ministers also agreed on co-operating on issues of tax evasion. The two countries would begin exchanging tax information on an automatic basis from 2017. The decisions were taken at the seventh round of India-UK economic and financial dialogue held in the capital. The next round of discussions would be held in 2015 in London.