India–EU FTA Allows EU Banks To Open 15 Branches, Binds 100% FDI In Insurance

New Delhi, Jan 29 (KNN) Under the recently concluded India–EU trade agreement, India has agreed to allow EU banks to open up to 15 branches over four years, expanding the earlier cap of 12 branches. 
 
India has also committed to binding foreign direct investment (FDI) in the insurance sector at 100 percent, in exchange for a more predictable and stable visa regime for Indian professionals working across EU member states, reported the Economic Times.

Forward-Looking Liberalisation Commitments

In an official statement, the government said India’s sectoral offers reflect a forward-looking liberalisation strategy, factoring in recent reforms such as 100 percent FDI in insurance, enhanced FDI limits of 74 percent in banking, and a more liberal bank branch licensing framework. 

Notably, similar relaxation on bank branches was not extended under the India–UK free trade agreement, although concessions were offered to New Zealand.

Boost for Financial Services Trade

These commitments place EU financial service providers in a stronger competitive position within India’s expanding financial services market, while aligning with India’s calibrated approach to gradual market opening. 

At the same time, the EU’s liberalised commitments are expected to help Indian financial service providers scale up operations in Europe, strengthening India’s financial services exports.

Easier Mobility for Professionals

The agreement also eases mobility norms. AYUSH practitioners and doctors will be allowed to open clinics and wellness centres in the EU, offering services based on qualifications obtained in India. 

Intra-corporate transferees across sectors will be eligible for three-year visas, extendable by another two years, with benefits also extended to spouses and dependents. This is expected to benefit Indian IT companies and multinationals operating across India and EU member states.

Growing Scale of India–EU Services Trade

The India–EU FTA marks a major milestone in bilateral economic engagement, with services trade between the two sides valued at around USD 83 billion in 2024. India exported nearly USD 700 million worth of financial services to the EU last year, while imports stood at about USD 600 million.

The Financial Services Annex under the agreement represents a significant upgrade over earlier GATS commitments, expanding to 16 articles.

Key areas covered include electronic payments and real-time transaction infrastructure, fintech and regulatory innovation, credit rating services, non-discrimination provisions, higher FDI limits, and expanded access for bank branches.

(KNN Bureau)