Govt likely to hike FDI cap in insurance today

Govt likely to hike FDI cap in insurance today Zeebiz Bureau

New Delhi: The Cabinet meeting scheduled on Monday is likely to consider a hike on foreign direct investment (FDI) in insurance sector.

According to reports, Centre could hike the FDI cap in insurance from the existing 26 percent to 49 percent.

Media reports also said the cabinet committee on economic affairs (CCEA) would take up the issue of enhancing FDI in the pension sector as well. The government wants FDI in the pension sector to be capped at the same level as in insurance.

As per the current regulation, a foreign player cannot have more than 26 percent stake in private insurance companies in the country.

Earlier, the Standing Committee had rejected the government's proposal to raise foreign direct investment ceiling to 49 percent in December last year.

The committee in its report on the Insurance Laws (Amendment) Bill, 2008, had said the proposal to increase the FDI cap to 49 percent in insurance companies seems to have been decided upon "without any sound and objective analysis of the status of the insurance sector following liberalisation".

With PTI Inputs