Govt may consider raising FDI cap in insurance to 49%
Govt may consider raising FDI cap in insurance to 49%
To give a push to reforms, the government may raise foreign direct investment limit in the insurance sector to 49% from the existing 26%. The Cabinet will consider 49% FDI in the insurance sector once again in the coming.
As per the current regulation, a foreign player cannot have more than 26% stake in insurance companies in the country.
In its meeting held on May 10, the Cabinet had postponed a decision on FDI ceiling in insurance.
It is to be noted that the Standing Committee had rejected the government’s proposal to raise foreign direct investment ceiling to 49% in December last year.
It had said that the policy stance of enabling a greater role for foreign capital in the insurance sector would not necessarily have the desired impact.
Foreign insurers and their domestic partners have been demanding an increase in the FDI cap to 49% to fund business expansion.
The government had introduced the Insurance Bill in the Rajya Sabha in December 2008 with an aim to bring improvement and revision of laws relating to insurance business in the changed scenario of private participation.
