In a bid to operationalise the path-breaking decision to hike the foreign direct investment (FDI) limit in the insurance sector, the commerce and industry ministry on Monday notified the sectoral cap increase to 49%.
A foreign player can now invest in insurance company, insurance brokers, third party administrators, surveyors and loss assessors, and other insurance intermediaries appointed under the provisions of IRDA Act 1999.
The Cabinet had proposed the hike in FDI limit through an Ordinance issued last year-end. A Bill is likely to replace the Ordinance, which may be presented in the Lok Sabha on Tuesday.
“The government has reviewed the foreign investment policy on the insurance sector. Accordingly, consolidated FDI policy, effective from April 17, 2014 is amended,” said the press note from the department of industrial policy and promotion.
Press notes are official documents through which new FDI policies come into effect.
It added that FDI up to 26% in the sector will be through the automatic route, while levels above 26% and up to 49% will have to come through the government route.