Union Minister for Finance and Corporate Affairs, Ms. Nirmala Sitharaman stated on Thursday that India collected FDI worth Rs. 26,000 crore (US$ 3.58 billion) in the insurance sector after the foreign investment limit was raised from 24% to 49% in 2015.
In response to a discussion on the Insurance (Amendment) Bill, 2021, Ms. Sitharaman stated that insurance companies are experiencing liquidity challenges, so the government is proposing to raise the FDI limit even further.
She stated that foreign direct investment (FDI) is intended to supplement domestic long-term capital.
Ms. Sitharaman stated that increasing the foreign investment limit to 74% will enable insurance companies reach their growing capital requirements.
The minister emphasized that the bill to raise the FDI limit in insurance was introduced after appropriate consultation with the sector regulator IRDAI.
The bill aims to raise the FDI limit in the insurance sector to 74%. The minister announced the decision while presenting the Union Budget on February 1, 2021.
At present, the permissible FDI limit in life and general insurance is 49%, with Indians owning and managing the company.
Source : IBEF
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