WASHINGTON: A leading business body in the US has hailed passage of the Insurance Laws (Amendment) Bill in India that raises the FDI cap to 49 per cent, saying such a legislation would promote investment, create jobs and increase financial stability.
The US India Business Council (USIBC), a business advocacy organisation representing global companies investing in India, commended Prime Minister Narendra Modi and his cabinet as well as leaders of the Opposition for their efforts in seeing this important reform through.
“The opening of India’s insurance sector sends a crystal clear signal that India is open for business at a time when economic opportunity is certainly welcome,” USIBC president Dr Mukesh Aghi said yesterday.
“While India’s insurance market has experienced impressive growth in recent years, the FDI limitations have restricted insurers’ ability to raise capital efficiently.
“Access to domestic and new foreign pools of long-term domain capital will provide financial stability,” he said.
“It will further enhance the industry’s ability to reach more Indian citizens and protect life and productive assets through efficient and cost-effective distribution channels across rural and urban India,” Aghi said.
“The insurance industry possesses the long-term assets needed to finance the long-term infrastructure projects India needs most,” the USIBC president said adding, ” We look forward to continuing to be full partners in India’s ambitious, important economic trajectory.”
PNB MetLife CEO Tarun Chugh welcomed the passage of the Insurance Bill by the Rajya Sabha, noting that increasing the FDI cap from 26 to 49 per cent will deliver significant benefits to the Indian economy.
“FDI not only brings in capital and foreign exchange immediately into the economy but also enables companies to invest further in managerial ability, technical knowledge, administrative organisation and innovations in products and production techniques,” he said.