Indian PM Insurance Reform Met With Obstacles

India’s government and main opposition party publicly support it. Foreign investors and many local businesses are also in favor.

Yet a plan to raise the foreign ownership cap for Indian insurance companies from 26 percent to 49 percent — a jump not even implying a transfer of control — has prompted an exhausting struggle among politicians and business leaders that shows how hard it will be for Prime Minister Narendra Modi to enact his promised economic reforms.

Mr Modi’s ruling Bharatiya Janata party still hopes to push the Insurance Laws Amendment Bill through parliament this month in what would be the first significant legislative reform of the six-month-old government.
Among the beneficiaries that would be able to raise their stakes are the UK’s Standard Life , which wants to list its joint venture with HDFC, and Mitsui Sumitomo and Nippon Life of Japan, whose partners are Max India and Anil Ambani’s Reliance Group respectively. The law, the wording of which has yet to be finalized, is also expected to allow the entry of reinsurers and of Lloyd’s of London, the insurance market.

The bill was first presented to lawmakers six years ago by a Congress-led government. But it has been held hostage by political point-scoring over unrelated issues — first by the BJP in opposition and now by other parties in the upper house of parliament — and stalled by protectionists in the industry reluctant to share a promising new market with foreign investors.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza