A delegation of European Parliamentarians of the International Trade Committee today pushed the Indian government to pass the pending Insurance Laws (Amendment) Bill 2008 that seeks to raise foreign direct investment (FDI) cap in the sector from 26% to 49%.
Allowing more FDI in the insurance sector has been one of the foremost demands of EU under the free trade talks that started in 2007 as it wants India to open up its banking and insurance sector.
But India, on the other hand, had been skeptic about this due to the ongoing financial recession there and the large-scale regulatory issues that plague EU's banking system.
“The insurance bill is a big concern for us. It is one of the pending issues for the EU negotiators. And this has not been agreed yet,” Pawel Zalewski, vice-chairman of the International Trade Committee under the European Parliament told reporters here today.
Zalewski is leading a high-delegation here to discuss some of the concern areas that have acted as a hurdle for concluding the free trade agreement (FTA) between India and EU, the talks for which started in 2007.
This is also the main reason why the scheduled meeting between commerce and industry minister Anand Sharma and EU Trade Commissioner Karel de Gucht, which was supposed to take place in June to close the talks have not yet happened delaying the talks even further to conclude the deal.
The decision to allow 49% FDI in the insurance sector was approved by the Cabinet in October last year. However, this can be implemented only when Parliament gives the green signal.
“There is a lot of negative perception about FTAs here. When I met the Indian parliamentarians today they expressed a lot of concern on the FTA regarding jobs, agriculture and intellectual property rights (IPR) laws,” Zalewski added.
He said that the European Commission has not asked India to change its IPR laws as part of the trade deal. “EU will not accept India changing IPR laws. We understand the role of generics here.”
He also added that talks have got delayed further with both India and EU heading for elections now. He, however, hoped that the both sides evaluate the present state of negotiations and conclude the deal, which will cover more than 95 percent of tariff lines and encompass a market of over 1.7 billion people.