Berkshire hopes insurance FDI cap is further raised

His US company Berkshire Hathaway has recently made a foray into the Indian non-life insurance sector as a corporate agent of Bajaj Allianz General. Buffett was understood to have discussed about various issues relating to insurance sector including the existing cap on FDI during his courtesy call on Insurance Regulatory Development Authority Chairman J Harinarayan here.

Currently India allows 26 per cent FDI in the insurance sector and the government is proposing to hike it to 49 per cent. The Congress-led UPA government during its first term had introduced the Insurance Laws (Amendment) Bill, 2008 proposing to hike the FDI limit to 49 per cent in the insurance sector. But the Bill is still not passed as it has become a politically sensitive issue with the Left Parties vehemently opposing such move.

“Buffett wanted to know whether the FDI limit for foreign insurers could go up to 49 per cent from the existing 26 per cent,” Harinarayan told newspersons. “The discussions were very general in nature,” he said.

Asked about Irda’s view on hiking the FDI cap in insurance sectoro, he said the government had already shown willingness to further relax the FDI cap.

Buffett is believed to be keen to make large investments in India’s fast growing insurance sector. Berkshire Hathaway head re-insurance Ajit Jain said the question of larger investments in the sector in India “depends on regulation.”