'The opening of the insurance sector does not necessarily exclude foreign participation by means of joint ventures with Indian companies'
Our company has been present in
India for the last three years as a
liaision office. We have an existing
joint venture agreement with local
Indian finance companies to establish
an insurance joint venture as soon as
the sector is opened. The amount of
investment required depends on the
sector (life or general insurance) and
anticipated business volumes.
We anticipate that this will require at
least a Rs 100 crore (Rs 1 billion) as
The FM's announcement said
that the sector would be opened to
Indian companies. This means AN
INDIAN REGISTERED COMPANY,
and DOES NOT NECESSARILY
PARTICIPATION BY MEANS OF
JOINT VENTURES with Indian
We realise that the opening of the
sector is politically sensitive.
Therefore, it would require some time
to get legislation through Parliament.
We are committed in the long term to
India and would be prepared to wait
for this to happen.
The measures to encourage
FDI flows is positive, but international
investors are also looking at political
stability, and issues such as the
nuclear tests within the region raises
some concerns for investors
The Budget should further
enhance the advantages that India
currently enjoys over the rest of
Southeast Asia. The concern over
political stability remains of some
concern and the effect of the sanctions
remains to be seen.
China remains the main competitor
for foreign investment versus India.
Foreign insurance companies will
bring to India the lastest technology
and products resulting in a wider
choice and improved levels of service
to the Indian consumer.
The battle is not yet lost, but it
will remain an uphill battle and things
like the bomb doesn't help. India must
create an image in the international
investor community as a safe, yet
attractive long term investment.
George Otto, Chief Representative, Allianz AG, spoke on the Rediff Budget Chat.