New Delhi: France on Monday said its companies are committed to invest over €10 billion into India in next two years and the inflows could go up even further if multi-brand retail and insurance sectors are liberalised.
India, on its part, assured France that liberalisation of the two sectors were “very much” on the agenda, but the policy has to be calibrated.
Planning Commission deputy chairman Montek Singh Ahluwalia said liberalisation in the FDI cap in the insurance and opening of the multibrand retail is “very much on the agenda”.
He said this in the presence of French minister of economy and finance Christine Lagarde who is part of the delegation accompanying President Nicolas Sarkozy.
In her meeting with Commerce and Industry minister Anand Sharma, Lagarde again sought assurance on retail sector.
“I talked assurance, I talked retail”, she said after the meeting with Sharma.
But Sharma said the policy formulation in a democracy is a calibrated procedure and feedback after consultations with the stakeholders have been very useful.
Lagarde shared with Sharma the experience of the retail sector in France, saying that a regulatory framework was in place so that farmers interest is protected.
Addressing the India French Business Forum, organised by FICCI, Ahluwalia said, “As far as insurance is concerned, the government has initiated the Parliamentary process to create a legislation to go for 49% FDI in the sector.”
At present FDI up to 26% is allowed in the insurance sector.
Lagarde said investment from French companies can go beyond €10 billion by 2012 if sectors like insurance and multi-brand retail are liberalised by India.
“There could be a lot more than that for sure, if it was possible to develop activities in insurance and retail,” she said adding “if the Indian authorities consider it sensible to open up the sectors, I know French companies will significantly expand their activities.”
She said, “Everything is about give and take and two-way street.”
On the French demand for increasing the FDI in insurance, Ahluwalia said that the UPA was a coalition government and it was important to build a consensus among its constituents.
“There is a coalition, you need to keep everybody happy (in Democracy). So, I am optimistic on the insurance front,” he said.
On FDI in multi-brand retail, he said, several ministries have supported the proposal for allowing FDI in the sector.
The government has already put out a discussion paper on the politically sensitive subject.