The Global Federation of Insurance Associations has given its support to a measure that would allow for greater foreign investment in Indian insurance joint ventures.
It has written to prime minister Manmohan Singh to offer support for the Indian Insurance Law Amendment Bill.
The Bill would increase from 26% to 49% the foreign direct investment allowed in Indian insurance company joint ventures.
GFIA chair Frank Swedlove said: 'The approval of the Bill will send a strong signal to the international community that India is open for business.'
He said the measure would enable closer cooperation between the Indian insurance industry and foreign reinsurers and lead to 'a sizeable injection of foreign investment in the Indian economy'.
The Bill also authorises the establishment of reinsurance branches in India, which has long been advocated by the international industry.
This would lead to increased competition, and enable appropriate risk diversification by insurance companies, the federation said.