Foreign Firms See Insurance In Bjp-Led Govt
Foreign insurance companies prefer a Bharatiya Janata Party (BJP)-led government at the Centre, as the right wing party is least likely to vacillate on the issue of opening up of the insurance sector to foreign companies.
Though the BJP has been vague on issues concerning the opening up of the economy in their manifesto, the party is least likely to vacillate on the issue. I guess they would most clear on the issue once they come to power.
Either they will allow us to enter the sector or will not, said the chief executive officer of a US-based insurance company. Either way, it is fine with us. But we need a clear answer, said the official.
The chief representative of a leading European pension fund pointed out that the BJP manifesto is not clear on the issue of opening up of the insurance sector.
But the party looks most likely to take a definitive stand on the issue, he said.
The party has said that it would allow only Indian private players in the domestic insurance market. But incidentally all the Indian companies are riding piggy-back on foreign insurance companies. None of them want to enter the insurance sector on their own. So what does opening the sector only to Indian private companies mean? asks the official.
The statements come even after the Congress unequivocally stated in its manifesto its commitment to liberalise the sector.
More than a dozen foreign insurers have already forged alliances with Indian private sector groups, and several of them have also opened representative offices in the country.
Sources say that some of these companies have been losing approximately Rs 1 crore annually on account of establishment costs and staff expenses.
We are making losses at the moment with no revenue coming in. But we hope to make much more once we are allowed to do business here, a UK-based insurer said. He added: If the Indian government does not want us to repatriate the profits out of India, that is also agreeable to us.
He also pointed out that India faces the risk of getting isolated in the global insurance market.
Though India has not given much away in the recent World Trade Organisation agreement on global financial sector, I am not sure whether that is a major for Indian diplomacy, he said.
The firms, however, are hopefulof the domestic insurance sector being thrown open for them. Almost all the companies said that they would rather wait patiently than pull out in a haste.India runs the risk of getting increasingly marginalised if it does not open the insurance sector. Thats a risk any government is unlikely to take given the global drift of events, an official said.