Govt Allows 100% FDI for Insurance Intermediaries
NEW DELHI : In an effort to facilitate foreign investments in India for insurance intermediaries, the Centre on Wednesday notified 100% Foreign Direct Investment (FDI) in the sector.
The steps include investor-friendly policies – like easing rules like 30 per cent sourcing from India for single brand retailers and legalisation of contract manufacturing to allow 100 per cent investment, said Union minister Piyush Goel, after a cabinet meeting this evening.
The cabinet committee headed by Prime Minister Narendra Modi has also decided that all procurements made from India by the single brand retail entity for the brand shall be counted as local sourcing.
Earlier, Union Finance Minister Nirmala Sitharaman had proposed 100% FDI for insurance intermediaries. Prior to this, the FDI limit was set at 49%. Sitharaman had also said that the government was also looking into the possibility of hiking the FDI limit in the insurance companies.
However, she did not indicate the new cap that the government was considering. Nevertheless, there were indications that the Narendra Modi-led government had been in favour of a 74% FDI cap for insurance companies.
For sale of coal, 100 per cent FDI has been allowed under the automatic route for mining and other activities including processing infrastructure, which would attract international players, the government said.
As part of the move, the Centre also approved 26 per cent overseas investment in digital media for uploading and streaming of news and current affairs, on the lines of print media.
The government had recently announced its intent to relax FDI norms in several sectors. While presenting the Budget in July, Sitharaman had said that the government intends to carry out FDI reforms in aviation as well as multimedia sectors like animation and gaming.
Sitharaman had also committed to easing sourcing norms on single brand retail and allowing 100% FDI for insurance intermediaries. The minister had also announced that foreign portfolio investment (FPIs) will be permitted to subscribe to listed debt securities issued by ReITs and InvITs.
