The Indian government is taking steps to significantly boost foreign direct investment (FDI) in the country’s insurance sector by enhancing comfort and flexibility for foreign investors. M Nagaraju, Secretary of the Department of Financial Services, Ministry of Finance, highlighted these efforts during the CNBC-TV18 Budget Verdict Townhall event on Monday.”We want to ensure that foreign investors are given the necessary comfort and flexibility in the Indian insurance sector, while still ensuring that premiums remain within the country,” Nagaraju said.Currently, the FDI inflow into the insurance sector stands at ₹82,000 crore over the last 24 years, a figure that Nagaraju believes does not reflect India’s full potential. To address this, the government plans to increase the foreign investment cap, allowing foreign ownership of up to 100% in Indian insurance firms, thereby offering greater confidence to international investors.
Also Read: Will submit the draft insurance bill to Cabinet shortly, says DFS Secy M NagarajuIn addition to ownership reforms, the government intends to simplify existing rules to provide foreign investors with more flexibility in appointing senior management and repatriating dividends. However, the requirement to invest premiums within India will remain intact.Nagaraju also expressed optimism about the future, citing strong interest from foreign players during consultations. “We expect a lot of enthusiasm. During our consultations with the stakeholders, we see huge potential for FDI inflows. We have to see how many companies will come to invest, how much investment will come.”While the full impact will depend on legislative approval, these changes are expected to bring more foreign capital into the insurance sector and foster its growth in the coming years.Also Read: India’s borrowing nearly fully allocated to capex, says DEA Secretary Ajay Seth
