The Telegraph
Since 1st March, 1999
Email This PagePrint This Page
Clamour for greater FDI in insurance sector

New Delhi, Nov. 29: Pressure is mounting on the government to raise the foreign investment limit in the insurance sector from 26 per cent to 49 per cent.

Just days after US treasury secretary Paul O’Neill used the G-20 meet in Delhi to lobby for the relaxation, insurance companies operating in India have started pressurising the government to concede the demand which they have been pushing for a very long time.

O’Neill had buttressed his argument by saying that China allowed foreign insurers to pick up a 50 per cent stake in insurance ventures in that country, hence there is no credible reason why India should not do the same.

S. K. Mitra, finance director of the Aditya Birla group, said there is no rationale for keeping the FDI limit in insurance at such a low level. Addressing a meeting of North India Council of the Indo-American Chamber here today, he said the foreign investment ceiling of 26 per cent in the insurance sector needs to be revised upwards to encourage larger FDI.

He stressed on the fact that insurance should not be treated as a political issue, it is purely an economic decision. “In the interest of the economy, it is therefore necessary to have a pragmatic approach towards this sector.”

On similar lines, Max New York Life CEO and MD Anuroop (Tony) Singh said, “Our joint venture agreement itself provides for a 50-50 stakeholding pattern as and when permitted by law. India is part of a global economy. I believe in free enterprise and market forces to determine what’s best for business while respecting the principle of reciprocity.”

Email This PagePrint This Page