According to reports, life insurance companies in India have requested the government to raise foreign direct investment (FDI) cap in the industry to 74% from the earlier 49%.
Earlier, the Life Insurance Council had held a general body meeting where the companies were in agreement with the council proposal to increase the cap limit in FDIs in the industry.
Also, in the Budget 2019-20, Finance Minister Nirmala Sitharaman had stated that the Centre would consider hiking the FDI ceiling across various sectors including the insurance sector in the country.
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The cap for foreign direct investment in the insurance sector stands at 49% at present. As Nirmala Sitharaman had announced on the Centre’s plan to open up FDI in the insurance industry, the Life Insurance Council had held a meeting for the stakeholders’ inputs earlier in December.
If the government decides to raise the cap on FDI, the sector can expect an increase in inflow for insurance companies. Also, the move will allow foreign investors to have more rights to the management of such companies.
For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in
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