100% FDI fillip for insurance, but firms must invest in India

Union finance minister Nirmala Sitharaman on Saturday announced the government's plan to allow 100% foreign direct investment (FDI) in the insurance sector, up from the current 74%, on the condition that foreign firms would invest the entire premium collected in India, a move that experts said would make additional funds available to Indian infrastructure projects.

- Rajeev Jayaswal

NEW DELHI:

"The FDI limit for the insurance sector will be raised from 74% to 100 per cent. This enhanced limit will be available for those companies which invest the entire premium in India," the finance minister said in her budget speech.

The FM said that the government would be open to review the condition later. "The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified," she said in the speech. Earlier, the FDI cap in the insurance sector was raised from 49% to 74% in 2021. The FDI limit was raised from 26% to 49% in 2015.