USIBC Hails Passage of Long-Awaited Insurance Reform
India’s Insurance Liberalization will Promote Investment, Create Jobs, and Increase Financial Stability
March 12, 2015 - Washington, DC – Today, the U.S.-India Business Council (USIBC) strongly commended the Government of India for the passage of the Insurance Laws (Amendment) Act, including a key provision lifting the foreign direct investment (FDI) cap from 26 to 49%. USIBC and its members believe that the reform is crucial to the long-term growth and prosperity of India and will have a beneficial impact on the lives of millions of Indians.
“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 Dr. Mukesh Aghi, President of USIBC. “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.”
“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. 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,” pronounced Dr. Aghi.
Aghi 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.”
USIBC offered strong support for the global investment community to view this reform as a sea-change signal for India’s investment climate across all sectors.
PNB MetLife CEO Tarun Chugh welcomed the passage of the insurance bill by the Rajya Sabha, noting that increasing the FDI cap 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 organization, and innovations in products and production techniques," said Chugh.
Formed in 1975 at the request of the U.S. and Indian governments, the U.S.-India Business Council (USIBC) is the premier business advocacy organization advancing U.S.-India commercial ties. Today, USIBC is the largest bilateral trade association in the United States, with liaison presence in New York, Silicon Valley, and New Delhi, comprised of 310 of the top-tier U.S. and Indian companies. The Chairman of USIBC is Ajay Banga, President and CEO, MasterCard.
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