Govt to review FDI policy in defence, insurance and plantation sectors

(MENAFN-KNN India)
New Delhi, July 8 (KNN)
The Indian government is reportedly planning to review foreign direct investment (FDI) limits in several key sectors, including defence, insurance and plantations.

According to a recent ET report, the aim of the review is to potentially improve the investment regime and make it more attractive to foreign investors.

The Department of Promotion of Industry and Internal Trade is reportedly exploring ways to make investment norms more attractive in the defence sector, as part of the government’s broader strategy to boost domestic production in strategic industries. Currently, 100 percent FDI is allowed in the defence sector.

In the insurance sector, where foreign direct investment (FDI) is currently capped at 74% for general and life insurance companies and 100% for insurance intermediaries, the government is considering a review, even though the sector is currently profitable and competitive.

Financial Services Secretary Vivek Joshi recently noted that the insurance sector has attracted about Rs 54,000 crore of foreign direct investment in the last nine years following liberalisation of rules on foreign capital flow.

Government sources told The Economic Times that the review is aimed at ensuring smooth flow of investments and meeting the deadlines of inter-ministerial procedures.

The decision comes after total foreign direct investment (FDI) inflows into India, comprising equity capital inflows, reinvested earnings and other capital, witnessed a marginal decline of 1 per cent to USD 70.95 billion in fiscal 2023-24, from USD 71.35 billion in the previous year, as per data from the Department of Promotion of Industry and Internal Trade.

This comprehensive review of Foreign Direct Investment (FDI) policies in key sectors is evidence of the Government’s proactive approach to maintaining India’s attractiveness as a foreign investment destination in the face of global economic challenges.

(KNN Office)

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