Washington, March 13 (IANS): Calling India’s insurance reform law as “crucial to the long-term growth and prosperity of India,” the US-India Business Council (USIBC) says it will have a beneficial impact on the lives of millions of Indians.

The trade group comprised of 325 of the top-tier US and Indian companies strongly commended a key provision in the Insurance Laws (Amendment) Act lifting the foreign direct investment (FDI) cap from 26 to 49 percent.

"The opening of India's insurance sector sends a crystal clear signal that India is open for business at a time when economic opportunity is certainly welcome," said USIBC President Dr. Mukesh Aghi.

"We commend Prime Minister Modi and his Cabinet as well as leaders of the opposition for their assiduous efforts in seeing this important reform through."

"While India's insurance market has experienced impressive growth in recent years, the FDI limitations have restricted insurers' ability to raise capital efficiently,” he said.

“Access to domestic and new foreign pools of long-term domain capital will provide financial stability,” Aghi said.

“It will further enhance the industry's ability to reach more Indian citizens and protect life and productive assets through efficient and cost-effective distribution channels across rural and urban India," he added.

"The insurance industry possesses the long-term assets needed to finance the long-term infrastructure projects India needs most,” Aghi said. “We look forward to continuing to be full partners in India's ambitious, important economic trajectory."

USIBC also offered strong support for the global investment community to view this reform as a sea-change signal for India's investment climate across all sectors.