After increasing the FDI cap in the Multi-brand Retail sector, Aviation sector, Power Trading, and Broadcasting sector, it is expected to raise the FDI ceiling in the Insurance and Pension sectors and the Pharmaceutical sector of India. Parliament on 22 March 2021 passed the Insurance Amendment Bill 2021 to increase the foreign direct investment (FDI) limit in the insurance sector to 74% from 49% in an attempt to attract more overseas insurance players to India. This increment in the FDI ceiling in the insurance sector of India will certainly be highly and greatly appreciated by domestic and foreign insurance companies, for the purpose of expanding and enriching their insurance and re-insurance businesses under diverse insurance categories. Prior to this increment in FDI ceiling in the insurance sector, the limit of foreign direct investment in the insurance sector of India, which was just 49%, was permitted to be made through the Automatic Route with proper license from the Insurance Regulatory and Development Authority (IRDA) of India; this means that a foreign investor could not acquire more than 49% stake in private insurance companies anywhere in India. As in all other economic sectors of India, our prestigious and globally reputed law firm well-based in India, has been providing perfect and swift legal services for secure and profitable foreign direct investment in the insurance sector of India or abroad, for a long successful period.
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Described explicitly in the Seventh Schedule of the Constitution of India, Insurance is one of the significant economic sectors of the country, which at present has extensive scope for expansion and development, to be at par with the insurance sectors in developed countries of the world. Progressing fast with an average yearly growth rate of over 30%, the current worth of Indian insurance industry is about 280 billion. Based on these statistical facts, the insurance industry of India has been ranked as the fifth largest and booming insurance market in the whole world. In the fiscal year of 2019, over 472 million people across India were covered under health insurance schemes which is just 34% of total population. In developed countries like USA, this percentage is about 92%. Hence, there is vast scope for development and refinement in the insurance sector of India in future times. But, at present, only about 50 life insurance and general insurance companies are active in the insurance sector of India. For such purposes, the Insurance Regulatory and Development Authority (IRDA) of India requires a capital infusion amounting to over US $12 billion in the next five years, by domestic and foreign insurance companies.