India, on Saturday, raised the foreign direct investment (FDI) limit in the insurance sector to 100% from the current 74%, a move aimed to boost overseas investments and improve insurance penetration in the country.
The change applies to insurers that invest their entire premium in India, Finance Minister Nirmala Sitharaman said, while presenting the annual budget.
Existing regulations and conditions governing foreign investment in the sector will undergo review and simplification, Sitharaman said.
In November, the Insurance Regulatory and Development Authority of India’s (IRDAI) chairperson, Debasish Panda, said the government should allow 100% FDI in insurance.
“To stick to India’s target of ‘insurance for all’ by 2047, we need a lot of capital … we need a lot of new entities to come in, there may be some consolidation happening,” Panda had said.
Shares of insurance companies such as SBI Life and HDFC Life rose 2.3% each, while ICICI Prudential Life ICIR.NS gained 3%.
Reuters
