Govt plans raising FDI cap in insurance sector to 74%

In line with the Budget announcements, the government is planning another round of overhaul of the foreign direct investment (FDI) policy with changes across sectors including insurance, contract manufacturing, digital media, and information utilities, besides single-brand retail trade.

The insurance sector could be opened up to 74% FDI under the approval route to bring parity with the banking sector, according to proposals under consideration. The current 49% foreign investment limit through the automatic route in insurance is likely to be maintained. For insurance intermediaries like brokers, insurance repositories, third-party administrators, etc, 100% FDI may be permitted.