The first major reform initiative by the new Indian government, increasing the FDI limit in India's insurance sector from 26 percent to 49 percent is a welcome move for many companies wishing to enter the market or expand the ownership of their current operation.
In December 2014 the Indian Government announced the increase of Foreign Direct Investment (FDI) from 26% to 49% for the Insurance industry. As one of the fastest growing insurance markets in the world, this increase presents a great opportunity for insurers who are already in India to increase their stake, or for those considering entering the market. In this article we provide an overview of the change and the opportunities associated with a rise in the FDI limit.
The Union Cabinet in India approved promulgation of an ordinance on the Insurance Laws (Amendment) Bill, 2008 on 24 December 2014. The ordinance was then signed by Mr. Pranab Mukherjee, the president of India, on 26 December 2014. While this still needs to be ratified by parliament, legal experts in India believe it is valid.