Business Daily from THE HINDU group of publications
Friday, Jan 19, 2007
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Business Daily from THE HINDU group of publications Friday, Jan 19, 2007 ePaper |
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Financial Policy Government - Foreign Relations More access for UK financial cos Our Bureau
OPENING UP: The Finance Minister, Mr P. Chidambaram, and the Chancellor of the Exchequer, UK, Mr Gordon Brown, at a meeting of India-UK Economic and Financial Dialogue in the Capital on Thursday. - Kamal Narang
New Delhi , Jan. 18 The Government today assured greater market access to British financial services companies, especially those in the insurance sector. On its part, it sought more branch licences for its banks to expand their presence in the UK. Indications were also given to the visiting UK Chancellor of the Exchequer, Mr Gordon Brown, that a Bill to raise the foreign equity cap in insurance companies would be brought before Parliament during the Budget session. The issue of increase in the foreign equity ceiling in the insurance sector has been hanging fire for some time now, with the Left parties putting up strong opposition to the move. The question of increased market access and ownership in financial services industry came up for discussion at the first official level meeting of the India-UK Economic and Financial Dialogue today. The Finance Minister, Mr P. Chidambaram, and Mr Brown led the two sides at the meeting. Mr Brown later told newspersons that Mr Chidambaram had indicated that he would introduce a Bill in Parliament next month to allow direct foreign ownership in insurance companies to be hiked from the existing 26 per cent to 49 per cent. The Bill would also allow companies with "unique structures" to enter the reinsurance market. "This would be of great benefit to Lloyds of London. We are very grateful to Mr Chidambaram for the proposed legislation on insurance," Mr Brown said at a joint news conference with Mr Chidambaram. On his part, Mr Chidambaram said that he had sought more branch licences for Indian banks in the UK. On whether Vodafone's interest in Hutchison Essar came up for discussion at the meeting, Mr Brown said that he was assured of a level-playing field (in the bidding process). "All areas of financial services were part of the dialogue. We have been assured of the level playing field," he said, without elaborating. Matters such as combating the financing of terrorism and regulatory regime on retail sector also figured in the discussions. India will now participate in the meeting of the financial action task force next month. Mr Chidambaram said that India had emerged as the second largest investor in the UK in terms of number of projects. FDI flows from India to the UK have exceeded those from the UK to India since 2004. "We are pleased that India has made the UK the location of choice for new investments in Europe. We welcome the fact that 60 per cent of FDI of India in Europe was directed to the UK," Mr Brown said.
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