Budget 2021: FDI hike in insurance to invite foreign majors

The Indian government on Monday proposed to increase the foreign direct investment (FDI) limit in the insurance sector to 74 percent, a move aimed at attracting greater overseas capital inflows to help enhance insurance penetration in the country.

In the first paperless Union Budget, Finance Minister Nirmala Sitharaman said under the new structure, the majority of directors on the board and key management persons would be resident Indians, with at least 50 percent of directors being independent directors, and specified percentage of profits being retained as a general reserve.

“I propose to amend the Insurance Act, 1938 to increase the permissible FDI limit from 49 percent to 74 percent in insurance companies and allow foreign ownership and control with safeguards,” she said while presenting the Budget 2021-22.