US wants India to raise FDI cap in defence, insurance to 49%

Lalit K Jha

Washington, Nov 19 (PTI) The Obama administration wants
India to lift the cap in both defence and insurance sectors, a
top US official said.

"One thing that I think the Indian government could do
would be to lift the cap on foreign equity in Indian defence
firms, from 26 per cent to 49 per cent," the Assistant
Secretary of State for South and Central Asia Robert Blake,
told reporters at a conference.
Blake said there will be a announcement about sort of a
new framework in trade after the US-India summit here next
week.
"This is an area where we have been working very hard and
made a lot of progress over the last several years. There is a
lot of ongoing work that we just need to continue," he said.
"I just think there's a tremendous amount of progress
that's already been made... but more is needed. Particularly I
talked earlier about the need to continue to open the
economy," he noted.
"For example American companies are very interested in
seeing investment caps lifted in the insurance sector, in the
defence sector, in several other -- in banking, in retail. And
all of those would provide significant new opportunities to
further expand our trade and investment," Blake said.