Berkshire Hathaway Chairman and CEO Warren Buffett’s highly publicized trip to India comes on the heels of the Omaha, Neb.-based conglomerate’s first foray into the Indian insurance market.
Last week, the company announced an agreement to act as licensed corporate agent of Bajaj Allianz General Insurance and market auto insurance policies directly to Indian consumers over the Internet.
Yet, despite this initiative, Berkshire Hathaway’s push into the Indian market remains hamstrung by the country’s Foreign Direct Investment (FDI) laws, which limit ownership stakes to 26% for foreign companies.
In a recent interview with India’s Economic Times, Ajit Jain, the Indian-born head of Berkshire's reinsurance unit, said the laws were a factor in the company’s decision to open an agency rather than purchase a stake in Bajaj Allianz. “When we are operating a company, we would like to have control over the company, to have 100% ownership of the company,” Jain told the paper. “Taking a minority shareholding and doing 100% work doesn't hold up for us. We are hopeful that the government will relax the limit.”
Nonetheless, at a press conference in Bangalore, Buffett seems bullish on the potential of the Indian market : "I do not consider India as an emerging market,” he said. “It is a large market."
