OECD wants India to ease FDI norms on banking, insurance

The Organisation for Economic Cooperation and Development (OECD) today lauded India's overseas investment policies but asked for relaxation in foreign direct investments (FDI) norms for banking and insurance sector.

"...Today (India is) a major destination for FDI and also a major source of FDI," the Paris-based club of 30 developed nations said in its first report on India's Investment Policy Review.

OECD Secretary General Angel Gurria said India has made significant progress in improving investment environment from the days of the  "licence raj", which shackled industry with numerous unnecessary permits.

"Crucial issues for investors have started to be tackled by the Indian government and issues like the intellectual property rights protection has been strengthened," Gurria said adding that sectoral FDI restrictions have been eased and foreign ownership caps have been lifted.

However, he said some challenges still remain which India needs to tackle to attract more foreign investment.

"The report suggests further easing of remaining FDI curbs...To support the government's important social and development goals. Many of the remaining FDI restrictions apply to sectors where productivity and growth need to be enhanced, such as banking, insurance and retail," he said.

He said the central government has reduced the number of approvals needed for new investment and administrative procedures need to be streamlined at the level of the states.