Budget proposes to hike FDI in insurance to 74%
February 01, 2021
Insurers welcome the move as insurance is a capital-intensive business
Finance Minister Nirmala Sitharaman has proposed to enhance the foreign direct investment (FDI) limit in insurance to 74 per cent along with relevant safeguards.
As part of the Union Budget 2021-22, she has proposed to amend the Insurance Act to increase the permissible FDI limit to 74 per cent in insurance companies and allow foreign ownership and control with safeguards.
At present, FDI up to 49 per cent is permitted in insurance companies.
“Under the new structure, the majority of directors on the board and key management persons would be resident Indians with at least 50 per cent of the directors being independent directors and a specified percentage of profits being retained as general reserve,” Sitharaman said.