The decision to allow 100 per cent FDI in insurance is a major reform aimed at achieving the goal of “Insurance for All” by 2047. It’s anticipated to bring in substantial foreign investments, enhance competition and improve accessibility to insurance across the country.
Finance Minister Nirmala Sitharaman has announced a significant hike in foreign direct investment (FDI) in the insurance sector, from 74 per cent to 100 per cent, paving the way for the entry of global insurance giants, substantial foreign investments and tough competition in the Indian insurance market.
The decision to allow 100 per cent FDI in insurance is a major reform aimed at achieving the goal of “Insurance for All” by 2047. With 100 per cent FDI, foreign insurers will have full autonomy to operate in India, bringing in sophisticated risk management practices, advanced technology, and innovative products to the Indian market.
Foreign investments will provide much-needed capital to the Indian insurance sector, enabling insurers to offer better products and services.
The FDI hike will benefit other foreign insurance companies which are not present in the country. Out of top 25 global insurance firms, as many as 20 are not present in India now. Further, there is a chance that foreign companies in existing Indian joint ventures may exit or buy out their Indian partners and form their own hundred percent ventures in India. “We could see India moving towards a future with 1,000 insurers in the next decade,” said Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance.
