The passage of the Insurance Law Amendment Bill by Parliament will pave way for not just global companies to step up their presence in India but also give a push to the trade pacts, which are being currently negotiated by the country. Experts say that it would also give India more head room for bilateral negotiations.
One major proposal that is likely to get a thrust is the ongoing EU-India Bilateral Trade and Investment Agreement (BTIA) negotiations. The European Union (EU) has been demanding market access in the insurance and banking sectors along with retail, legal and accountancy. However, not much breakthrough was achieved since the last round of talks, which started in June 2007, was held in May 2013.
Apart from these two sectors, the talks have been stalled owing to the 28-nation bloc’s concerns about high tariffs on cars and wines, issues related to geographical indication, and public procurement while India’s concerns on services. The two way trade between the EU and India stood at $101.53 billion in 2013-14.
Abhijit Das, head and professor, centre for WTO studies, IIFT, said that the passage of the Bill will provide India the room for negotiation.
“It will help India to take commitments while providing signal that the country is on path of autonomous liberalisation. By making the domestic policy liberal, it has more head room for negotiating better deals,” Das said.
Similarly, the insurance sector is of huge interest to Australia, which is engaged in negotiations for a free trade agreement with India. The negotiations to conclude a Comprehensive Economic Cooperation Agreement (CECA) between the two nations were launched in May 2011, following which there have been five rounds of negotiations, the last being held May 2013. According to the feasibility study for the CECA, finance and insurance are the largest sectors in the Australian economy in terms of gross value added, generating 10.7 per cent of real gross value-added in 2009.