Canada has called upon India to further open its banking and insurance sectors so that Canadian banks and insurance companies can increase their presence in India.
Bank of Nova Scotia, Royal Bank of Canada, TD Bank and Bank of Montreal have been operating here for quite sometime. Also, Sun Life has tied up with Aditya Birla Group for insurance business. The Canadian Council of Chief Executives and Canada-India Business Council argued that Canadian banks and insurance companies could bring in more money into the country, if the current norms were relaxed.
The RBI norms allow foreign banks to open 12 branches annually. Similarly, foreign insurance companies are allowed to hold only 26 per cent in a joint venture with the Indian partner.
John Manley, president and chief executive officer of Canadian Council of Chief Executives, and Roy MacLaren, chairman of Canada-India Business Council, told Business Standard, “The Indian government and the RBI can revise the existing norms by allowing foreign banks to open more than 12 branches annually. Besides, in the insurance sector, the equity limit be increased to 49 per cent from the present level of 26 per cent . We expect some action in this regard from the Indian government.”
Besides, they made a strong pitch for completion of necessary formalities by India to enable both Canada and India to quickly sign the civil nuclear cooperation agreement. “There has not been any action so far, even though the Canadian prime minister during his visit in November last had desired to quickly enter into the civil nuclear cooperation treaty. Canada expects India to complete necessary formalities so that the deal can be sealed.”
MacLaren also informed that the Atomic Energy Commission of Canada had expressed its desire to supply nuclear reactors to India. He added that the civil nuclear cooperation agreement would create opportunities for trade in engineering services, design and construction of plants and subsystems and uranium supply and mining.
On a foreign investment protection agreement (FIPA), Manley said it had been negotiated, but not yet ratified by India. “FIPA will provide investors a transparent and predictable environment to operate by according national treatment to companies operating in each others’ jurisdiction,” he added.
On the comprehensive economic partnership agreement (CEPA), MacLaren said it would expand export opportunities for Indian and Canadian companies, strengthen investors’ rights, increase the ease of doing business. However, he said that India was yet to prepare its grounds for a proposed joint study for CEPA. He hoped India would expeditiously complete the required formalities in this regard, so that a joint study could be undertaken for the proposed CEPA.
