FDI hike in insurance to 49%

The Union Cabinet approved the proposal to raise the foreign direct investment, FDI, in insurance sector to 49 per cent, from the current level of 26 per cent. Finance Minister Arun Jaitley, in his budget speech, earlier this month had proposed to raise the cap. The proposal to raise FDI cap has been pending since 2008 when the previous UPA government came up with Insurance Laws (Amendment) Bill to hike foreign holding in insurance joint ventures to 49 per cent. The BJP had earlier opposed it, saying it may not have the desired effect and could expose the economy to global vulnerability. The insurance sector was opened to private players in 2000 after the enactment of the Insurance Regulatory and Development Authority (IRDA) Act, 1999.