With a view to attract more overseas inflows, the government is contemplating a proposal to permit 49 percent Foreign Direct investments (FDI) via automatic route in the insurance sector. The government could announce this decision in the forthcoming Budget. This move would help in improving ease of doing business.
Currently, FDI as much as 26% is permitted by means of automatic approval route. For FDI as much as 49%, the approval of FIPB is required. Apart from Insurance Regulatory and Development Authority (IRDAI), RBI is also looking at and the management is in the hands of Indian then the government may do away with the FIPB approval route. At present, there are 52 insurance companies operating in India, of which 24 are in the life insurance business and 28 in the general insurance. State-owned General Insurance Corporation (GIC), in addition, is the sole national reinsurer.
India has received $4.5 billion foreign direct investment (FDI), recording a whopping 114 percent growth during December 2015 which was more than double against the same period in 2014. During the period, the sectors which attracted FDI include computer software and hardware, trading, services, automobile and telecommunications. India receives maximum FDI from Singapore, Mauritius, the Netherlands and Japan.