Government to raise the FDI limit in insurance firms to 74%, says report

The government is likely to raise the FDI limit in insurance from 49 to 74 percent, reported The Economic Times. The decision, which is likely to be presented during the February budget, will pave the way for foreign control of companies, the report said, quoting sources.

“The government is seriously contemplating opening up the sector as it wants long-term stable money to be invested in the country. The Insurance Regulatory and Development Authority of India (Irdai) is seeking inputs from industry people on government instructions and a report is expected to be submitted soon…If all goes well, the government is planning to introduce this as part of the budget announcement and take a shortcut so that it gets Parliament’s nod as part of the Finance Bill,” a person close to the development was quoted as saying in the report.

The development comes, the report said, after Irdai sought the views of various stakeholders on the matter in a December 2 letter at the direction of the government.  Finance minister Nirmala Sitharaman had announced in the July budget that the government will examine suggestions from various stakeholders to further open up FDI in the insurance sector.