Garry Comerford, company vice-president who is heading Sun Life's India operation, said the agreement was on a 50-50 basis in the financial sector and involved distribution and management of mutual funds, assets management and distribution of financial services. He wouldn't reveal the company's actual investment in India but said "it is a substantial amount." "India has great potential," Comerford told India Abroad News Service. Instead of waiting for privatisation of the insurance industry, Sun Life had decided to make its presence felt in India through the financial services sector, he said.

By entering the Indian market in the financial sector "we will learn the rules and regulations of the Indian market, begin to understand it and we will be in a better position to take advantage of it when the insurance sector is privatised,"Comerford explained. He said his company was very pleased to be able to have this joint venture in the financial sector with the Birla group which will also be its partners in the insurance industry, if and when it is opened to the private sector. "India is a substantial market," Sun Life Chairman Don Stewart said.

Three companies have already been formed: Birla-Sun Life Assets Management, Birla-Sun Life Securities and Birla-Sun Life Distribution under the agreement. Comerford said the company had been talking to the Birla Group for over two years on the venture.

On the proposal to open the Indian insurance industry to foreign companies, Comerford said the 26 per cent equity participation proposed in the Bill that was introduced in the Indian Parliament before it was dissolved in April was not adequate. "We are not particularly pleased with this 26 per cent proposed participation. There should be a fair opportunity for foreign investors and so I hope eventually this 26 per cent equityparticipation will be increased to 50 per cent," he said. The market should be attractive for foreign investment, Comerford said, adding, "In any case the Life Insurance Corporation in India will continue to play a formidable part in the insurance sector even after the industry is open to private investment." However, he said India should decide once and for all whether the insurance industry should be opened to private investment or not. "This on again and off again approach is wrong," Comerford stressed.