The government is planning to increase the overseas investment limit in insurance from the present 49% to 74%, according to a report of The Economic Times. The move is said to feature in the upcoming February Budget.
The Insurance Regulatory and Development Authority of India (IRDAI) sent a letter to various insurance companies on December 2 to seek their suggestions on this matter.
"The government is seriously contemplating opening up the sector as it wants long-term stable money to be invested in the country. IRDAI is seeking inputs from industry people on government instructions and a report is expected to be submitted soon," a person aware of the development told the newspaper.
As per the proposal, the foreign direct investment (FDI) limit would be raised to 74% over time. However, foreign insurers want it to be set at 74% without delay, the person quoted above said.
In 2015, the government had raised FDI in insurance under the automatic route to 49% from 26%.
Earlier, the approval for investment up to 49% required approval by the Foreign Investment Promotion Board (FIPB) but it was disbanded two years ago.
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