Govt mulls 49 pc FDI in Indian insurance market

The Indian government is considering a proposal to permit 49 percent FDI through automatic approval route in the insurance sector with a view to attracting more overseas inflows.

Currently, FDI up to 26 percent is permitted through automatic approval route. For FDI up to 49 percent, the approval of Foreign Investment Promotion Board is required.

According to sources, the government could announce this decision in the forthcoming Budget as the move would help in improving ease of doing business also.

At present, as many as 10 proposals, including that of ICICI Prudential Life, ICICI Lombard General Insurance and Aviva Life Insurance, are pending at different stages of clearances.

There are 52 insurance companies operating in India, of which 24 are in the life insurance business and 28 in the general insurance. State-owned General Insurance Corporation (GIC), in addition, is the sole national reinsurer.

In order to deepen the re-insurance market, IRDAI permitted UK-based Lloyd's to set up business in India.