The US-India Business Council (USIBC) has lauded the Narendra Modi Government for the passage of the Insurance Bill, terming the measure to raise the foreign direct investment cap from 26 per cent to 49 per cent a strong signal to the international business community. “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,” said USIBC president Mukesh Aghi. “We commend Prime Minister Modi and his Cabinet as well as leaders of the Opposition for their assiduous efforts in seeing this important reform through.”
As the top US-India business body affiliated to the US Chamber of Commerce, the USIBC has been campaigning hard over the years for a series of key reforms, including the wider opening of the insurance sector. While India’s insurance market has experienced impressive growth in recent years, the FDI limitations had restricted insurers’ ability to raise capital efficiently, Aghi said, noting the access now being provided to both domestic and new foreign pools of long-term domain capital would provide financial stability. “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,” he said.
Asserting that the insurance liberalization would give a great fillip to investment, job creation and financial stability, the USIBC said: “The insurance industry possesses the long-term assets needed to finance the long-term infrastructure projects India needs most. We look forward to continuing to be full partners in India’s ambitious, important economic trajectory.” Raising the FDI cap will deliver significant benefits to the Indian economy, said PNB Metlife CEO Tarun Chugh. “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 organization, and innovations in products and production techniques,” he said.