India's Insurance Sector Primed for 100% FDI Boost

The Insurance Regulatory and Development Authority of India has formed a committee to explore amendments to the Insurance Act, 1938, including a proposal to increase foreign direct investment in the insurance sector to 100%. The committee will review the implications and suggest a framework for implementation.

The Insurance Regulatory and Development Authority of India (Irdai) has constituted a seven-member panel, led by Dinesh Khara, former chairman of State Bank of India, to assess suggested changes to the 1938 Insurance Act.

These amendments, as announced by Finance Minister Nirmala Sitharaman in her recent Budget speech, would allow for 100% foreign direct investment in the insurance sector, up from the current 74% cap, provided firms invest their entire premium in India.

Khara's committee met for the first time this week to deliberate on how these policy changes might be implemented, aligning with existing regulations and aiming to increase sector penetration and job creation.

(With inputs from agencies.)