49% FDI in insurance sector welcomed

India: Welcoming the Cabinet’s approval to raise foreign direct investment (FDI) ceiling, the Confederation of the Indian Industry (CII) said the move will drive capital infusion in the cash-starved sector by attracting investments from foreign players, enhance insurance cover and push firms to provide long-term savings vehicles.

“We welcome the Cabinet’s approval to increase FDI limit in insurance from 26 to 49 percent with full Indian management and control, as it will help in attracting much needed long term capital for the sector, which can have multiplier effect on the state of the economy, especially in meeting the huge infrastructure financing requirements,” said Chandrajit Banerjee, director general of CII.

The proposed FDI increase will hopefully drive capital infusion in the insurance sector and revive growth, said Amitabh Chaudhry, FICCI Insurance Committee chairman, who is also managing director and chief executive of HDFC Life Insurance.