Insurance sector to get higher FDI
Goverment has allowed 26 per cent FDI in insurance companies through automatic route
By : DC Correspondent
Update: 2015-02-21 03:30 GMT
New Delhi: Before the start of crucial budget session of Parliament, the government on Friday notified rules to increase foreign direct investment (FDI) in insurance sector to 49 per cent. It allowed 26 per cent FDI in insurance companies through automatic route. FDI proposals which take the total foreign investment above 26 per cent and up to the cap of 49 per cent will require Foreign Investment Promotion Board’s (FIPB) approval.
The finance ministry said that these rules have been prepared based on extensive consultations with all the relevant departments and organisations.“Foreign equity investment cap of 49 per cent is applicable to all Indian insurance companies and they shall not allow the aggregate holdings by way of total foreign investment in their equity shares by foreign investors, including portfolio investors, to exceed forty-nine per cent of their paid up equity capital,” said the finance ministry. The ownership and control of insurance companies will have to remain at all times in the hands of resident Indian entities.