DIPP notifies 49% FDI under automatic route in Insurance and Pension sector
The Union Commerce and Industry Ministry has notified foreign direct investment (FDI) upto 49% in insurance and pension sector will be under automatic route.
In this regard, Department of Industrial Policy and Promotion (DIPP) has issued official notification to liberalise its FDI policy in insurance and pension sector.
However, FDI above 49% will be subject to approval of the Foreign Investment Promotion Board (FIPB). Prior to this, only up to 26% FDI was permitted through the automatic approval route in insurance and pension sector.
Union Government in 2015 had increased the FDI cap in insurance and pension sector to 49% from 26%, respectively. But it was subject to the condition that ownership and control remains with the Indian promoter at all times.
Thus, existing guidelines on Indian management and control will have to be verified by the respective regulators, Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA).
Presently there are 52 insurance companies operating in India, of which 28 are in general insurance and 24 are in life insurance business. FDI into the country has grown by record 40% to $29.44 billion during April-December 2015.