The new FDI limit in the Insurance Sector as per the Insurance (Amendment)…

Concept

Foreign Direct Investment (FDI) caps in regulated Indian sectors are set by statute and revised through amendment legislation. The insurance sector's foreign-investment ceiling is governed by the Insurance Act, 1938, which is periodically amended to change the maximum permissible foreign shareholding in an Indian insurance company.

Application

The Insurance (Amendment) Act, 2021 (passed as the Insurance (Amendment) Bill, 2021) amended the Insurance Act, 1938 to raise the foreign-investment ceiling in Indian insurance companies. The change was:

• Earlier limit: 49 per cent (set by the 2015 amendment).

• Revised limit (2021): 74 per cent.

This was announced in the Union Budget 2021-22 and enacted to allow greater foreign capital and ownership in the Indian insurance industry, subject to safeguards on Indian management and control. The correct value is therefore 74 per cent.

Cross-check

The statutory progression confirms the figure: 26 per cent (original) to 49 per cent in 2015, and then 74 per cent in 2021. The other listed figures do not correspond to any insurance-sector FDI milestone.