US lawmakers applaud India’s move to increase FDI in insurance sector to 74%

Two influential US lawmakers have applauded the Indian government’s move to increase foreign direct investment (FDI) from the existing 49% to 74%. The Indian Parliament had passed the Insurance Amendment Bill 2021, last month, to increase the FDI limit in the insurance sector.

Congressman Brad Sherman and Steve Chabot, as per PTI, said they are very encouraged by the inclusion of a proposal to raise the limit on FDI in the Indian Insurance Sector. “This long-awaited reform holds the promise of expanding insurance coverage for Indian consumers and businesses, prompting both financial inclusion and economic resilience in India,” they said.

The two lawmakers, in a letter to the Indian Ambassador to the US Taranjit Singh Sandhu, said such a move proposed in the recent annual budget would also increase the availability of capital to support India’s ambitious infrastructure goals. In addition to advancing Indian economic development, it said this reform would further deepen US-India trade and investment ties at a critical moment for bilateral relations.

“Considering these benefits, we urge you to take all available steps to ensure that this reform is expeditiously implemented law without requirements that would undermine its efficacy and its consistency with international norms,” the letter said.

The lawmakers also stated that given the opportunity to increase their investments in the Indian market, US insurers will be able to expand their offerings of innovative, competitively priced insurance products – serving existing demand and stimulating new demand, and thereby help improve Indian public safety, health and security.

Berman and Chabot said the increased investment would also support India’s funding and maintenance of infrastructure that will boost India’s growth and development over the long-term. The reform would also eliminate a longstanding barrier in the bilateral economic relationship.

Also Read: Italy launches mega food park project in India

“A durable and mutually beneficial economic relationship requires reciprocity. Raising the limit on FDI in the insurance sector from 49% to 74% is an important step toward establishing reciprocity in the insurance sector between the United States and India, as the US imposes no foreign equity limitations in this sector,” they said.