Two influential US lawmakers have applauded the Indian government''s move to increase foreign direct investment in the insurance sector from the existing 49 per cent to 74 per cent, saying it will further deepen bilateral trade and investment.

India''s Parliament last month passed the Insurance Amendment Bill 2021 to increase the foreign direct investment (FDI) limit in the insurance sector.

“We are very encouraged by the inclusion of a proposal to raise the limit on foreign direct investment in the Indian Insurance sector from 49 per cent to 74 per cent," Congressman Brad Sherman and Steve Chabot said.

"This long-awaited reform holds the promise of expanding insurance coverage for Indian consumers and businesses, promoting both financial inclusion and economic resilience in India,” they said.

Sherman is the Democratic Co-Chair of the House Caucus on India and Indian Americans. Chabot is the Republican Co-Chair of the Caucus.

In a letter to the Indian Ambassador to the US, Taranjit Singh Sandhu, the two lawmakers said that such a move proposed in the recent annual budget would also increase the availability of capital to support India''s ambitious infrastructure goals.

Finally, in addition to advancing Indian economic development, this reform would further deepen US-India trade and investment ties at a critical moment for bilateral relations.

“Considering these benefits, we urge you to take all available steps to ensure that this reform is expeditiously implemented law without requirements that would undermine its efficacy and its consistency with international norms,” the two lawmakers said in their letter to Sandhu.

According to Berman and Chabot, given the opportunity to increase their investments in the Indian market, US insurers will be able to expand their offerings of innovative, competitively priced insurance products – serving existing demand and stimulating new demand – and thereby help improve Indian public safety, health, and security.

Berman and Chabot said the increased investment would also support India''s funding and maintenance of infrastructure that will boost India''s growth and development over the long term.

The reform would also eliminate a longstanding barrier in the bilateral economic relationship.

“A durable and mutually beneficial economic relationship requires reciprocity. Raising the limit on foreign direct investment in the insurance sector from 49 per cent to 74 per cent is an important step toward establishing reciprocity in the insurance sector between the United States and India, as the United States imposes no foreign equity limitations in this sector,” they said.

“Taking this step now would signal to the US Congress and the Biden administration that India is willing to conquer historical barriers to increasing bilateral trade and investment,” the two lawmakers wrote in the letter to Sandhu.