Mumbai: In a bid to attract greater overseas capital into the country, Finance Minister Nirmala Sitharaman proposed in the Budget 2019-20, presented on Friday, to allow 100 per cent Foreign Direct Investment (FDI) into insurance intermediaries.
Besides, she proposed that local sourcing norms will be eased for FDI in 'Single Brand Retail' sector. According to the minister, the government will examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders.
The insurance industry has welcomed the move saying the move will give the muchneeded long-term capital for the sector and bring in professional advisory to help customers. Canara HSBC Oriental Life Insurance's Anuj Puri said more FDI can help bring in long term capital which is essential in the insurance business.
"The proposal to allow 100 percent FDI in insuranc intermediaries will help entry of large professional advisories which will go a long way in helping customers identifying and fulfilling insurance needs by getting in best-in class services and global experience," Puri said.
Reliance Nippon Life's Ashish Vohra said FDI proposal will bring in cost effective capital for several insurers who are investing in technology and digital solutions.
"Our insurance penetration is still lower than other Asian countries, and more FDI will help in driving this positively," Vohra said. Manipal Cigna Health Insurance's Prasun Sikdar said thiswill ensure higher penetration.