Ficci for increasing FDI cap in insurance to 74 pc

The government needs to increase foreign direct investment cap in the insurance sector and multi-brand retail trading for products manufactured and sourced from India for attracting overseas inflows, industry chamber Ficci said Thursday.

"In line with 100 per cent FDI in food retail, a similar policy could be considered for multi-brand retail in products that can be fully manufactured in and sourced from India," Ficci said in its pre-Budget suggestions to the government.

It said that in the insurance sector, FDI cap can be increased from 49 per cent to 74 per cent.

"To increase FDI flows in this sector, the clause pertaining to Indian management and control needs to be relooked. Reinsurance sector FDI can be restricted to 49 per cent with Indian management and control," it added.

The body also said that there is a need to improve investor confidence about the surrounding ecosystem in the country to attract more FDI inflows.

"Enforcement of contracts and arbitration process needs to be strengthened. Even when awards have been given, enforcing the awards remains a challenge," it said.

Further it said that India's new Bilateral Investment Treaties (BITs) with several countries are still to be renegotiated.

"Having in place BITs enhances the confidence level amongst foreign investors," it said.