Low FDI cap in the insurance sector is an 'outstanding issue' for India-EU free trade pact and the EU is waiting for the Indian Parliament to pass the bill that aims to raise the limit, a European Union official has said.
Brussels: Low FDI cap in the insurance sector is an 'outstanding issue' for India-EU free trade pact and the EU is waiting for the Indian Parliament to pass the bill that aims to raise the limit, a European Union official has said.
The Insurance Laws (Amendment) Bill 2008, which seeks to raise FDI cap in the sector from 26 percent to 49 percent, is much awaited by global investors but has been pending for long in Parliament.
"There are few issues in services which are still outstanding... Obviously insurance is very important," a senior EU official said here, requesting anonymity.
"We are also waiting to see what happens perhaps in the Indian Parliament on the insurance bill. It has been there for very long time," the official added.
About EU's stance on hiking the FDI cap as a pre- condition for inking free trade pact between India and the 28-nation block, New Delhi has expressed its inability to do so without the approval of Parliament.
Finance Minister P Chidambaram has earlier expressed hope that the government would be able to push insurance bill in the Winter Session of Parliament, which will begin tomorrow.
India and the EU have been negotiating the India-European Union Broad based Trade and Investment agreement (BTIA) since June 2007. They have missed several deadlines to conclude the talks due to differences over the level of opening up of the markets to each other.
On the issue of granting data secure status for the Indian IT industry under the proposed FTA, the official said: "In trade negotiations, we are not going to be negotiating about the issue of data secure status for the Indian IT industry.
"But we fully acknowledge that India has an important economic interest in facilitating transfer of data therefore India has an interest in the matter."
Data-secure status is a major demand of India as the lack of this status has prevented the flow of sensitive information to the country. It is a big deal for the country's IT industry, a global leader in the outsourcing sector.
This has also impacted the movement of people through restrictions on business development. It restricts transfer of personal data to locations outside EU, unless the importing country ensures adequate data protection.
India has been arguing that since US has a safe harbour pact with the EU, and that the US and India have a data adequacy agreement, the EU should also extend data adequacy status to India.
The official said that for the EU a concrete ambitious trade agreement with India is of extreme importance.