Higher Insurance FDI May Attract $12 Billion

Allowing 100% foreign direct investment in insurance could bring up to $8-12 billion worth of capital flow into the country in three to five years, encourage expertise and niche products, and possibly help normalize premiums due to increased competition, according to insurers.

- Anshika Kayastha

MUMBAI:

Foreign investments will, however, take some time as the potential entry of foreign players interested in the Indian market means that some existing joint ventures with Indian companies will need to be dissolved before they can enter and establish standalone operations, according to industry stakeholders Mint spoke with.

"Some foreign players may want to participate in a larger way in the India growth story with this relaxation of FDI norms, and hence there may be some change in existing JV structures," said Pallavi Malani, India leader-insurance practice at BCG. The industry is likely to see heightened investments and M&A activities in the coming months, she said.