On Wednesday, April 8, 2015, the Reserve Bank of India issued a notification of Government’s decision to raise the bar of FDI limit in insurance sector to 49%. This move has been welcomed by the insurance industry of India as it will entice global insurance companies to set up units in India and the existing firms to increase their investment. The ability to absorb more foreign capital will also spur some insurance companies to list on the local stock exchanges via initial public offerings. As per the DIPP (Department of Industrial Policy and Promotion) guidelines, FDI of up to 26 per cent come under automatic route and beyond 26 per cent and up to 49 per cent government approval is needed.
To know more, read the following Economic Times article: