The Rajya Sabha recently passed a Bill to raise the limit on foreign equity participation from 49% to 74% in the insurance sector. Higher foreign equity participation will help insurers tide over solvency-related issues, increase competition and efficiency. Mint explains.
What is the rationale behind such a Bill?
Raising the limit on foreign equity participation in insurance means the caveat that such firms remain Indian-owned and controlled is now removed. This is expected to attract prominent global insurers to set up shop in India, which will take care of liquidity pressures. It will also help companies achieve growth and will