Previously, the Select Committee on the Insurance Laws (Amendment) Bill had recommended a composite cap of 49% on FDI in insurance, which includes all forms of FDI and foreign portfolio investments.
In August this year, the Rajya Sabha had formed a 15-member select committee to analyse the Insurance Laws (Amendment) Bill, 2008, which had been held up for nearly six years on account of political differences.
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The report had adopted 88 amendments, which were earlier suggested by the Congress, the main opposition party in India.
Chaired by Rajya Sabha member Chandan Mitra, the parliamentary committee has also supported the issuance of fresh equity for raising stake, even though this has not been stipulated as mandatory.
Some unnamed industry officials told Reuters that the raising of the cap would bring in foreign investment worth up to $2bn into the sector within a year of its implementation.
Following the Cabinet’s approval, the Bill is expected to come up for consideration and passage in the Rajya Sabha next week and if approved, the bill is likely to be passed by the Parliament in this session.
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