Foreign Direct Investment (FDI) cap in the insurance
sector has been raised to 49 per cent from 26 per cent.
In a press note, The Commerce & Industry
Ministry said this follows approval given by the Union Cabinet to promulgation
of an Ordinance hiking the FDI limit in the insurance sector to 49 per cent in
December last year, after the legislation to amend the insurance law could not
be passed in the winter session of Parliament.
As per the press note (number 3 of 2015 series)
issued by the Department of Industrial Policy & Promotion, FDI up to 26 per
cent in the insurance sector will be through the automatic route, while levels
above 26 per cent and up to 49 per cent will have to come through the
Government route.
Copies of the press note have been forwarded to
officials in the Department of Economic Affairs and the Reserve Bank of India
for “suitably incorporating the policy changes in the Foreign Exchange Management
Regulation 2,000.”
The Insurance Laws Amendment Bill, 2008 could not be
taken up for discussion despite being approved by the Select Committee of the
Upper House as Opposition parties had vehemently opposed it because of
conversion and other issues.
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