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Informist, Monday, Feb. 17, 2025

 

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--Sitharaman: Need to open insurance sector, welcome more FDI 
--CONTEXT: Finance Minister Sitharaman speaks at post-Budget event in Mumbai 
--Sitharaman: Need more players in insurance sector
--Banking secy: PSU insuance cos doing well
--CONTEXT: Banking Secy Nagaraju speaking at post-Budget interaction 
 

MUMBAI – India needs more foreign investments in the country's insurance sector to support its growth, Finance Minister Nirmala Sitharaman said on Monday at a post-Budget interaction with stakeholders here. She stressed the need for deeper penetration in the sector and welcomed further foreign direct investment to help achieve this.

 

"You are also looking at further reforms in terms of making, opening up sectors and bringing in greater FDI (foreign direct investments) for insurance," Sitharaman said.

 

However, she also emphasized that while foreign investments are encouraged, the government will ensure that country's citizens are protected. "At the same time guardrails have been put in place so that India's own citizens' money towards premium payment for insurance is kept within the country and is not taken out," Sitharaman said. "Investments are also going to be here, and the profits they generate will have to also be used here."

 

The push for more foreign investment follows the announcement in the Union Budget for 2025-26 (Apr-Mar), in which Sitharaman proposed raising the FDI limit for insurance companies to 100% from 74%. The new rule will apply to insurance companies that reinvest all their premium income within India.

 

This is not the first time the government has increased the FDI limit in the insurance industry. In 2015, the FDI limit was raised to 49% from 26%, and then to 74% in 2021. With this new proposal to raise the cap to 100%, foreign insurers are expected to invest more in the market, which could benefit both the companies and the consumers. 

 

Asked about the reports of employees in government-owned insurance companies facing low morale, Department of Financial Services Secretary M. Nagaraju, who was also attending the interaction, said this was the first year (FY24) that insurers have seen a profit, which means they are doing well and there is no reason to believe that morale is low.  End

 

Reported by Kabir Sharma

Written by Sachi Pandey

Edited by Tanima Banerjee

 

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