Government amends FEMA to enable FDI hike in insurance sector to 74%

Applications for FDI in pvt banks having JVs in insurance sector may be addressed to RBI for consideration in consultation with IRDAI to ensure foreign investment limit of 74% is not breached

The government has amended the Foreign Exchange Management (non-debt instruments) Rules, 2019 to enable the increase in foreign direct investment limit in the insurance sector to 74 per cent.

According to the Foreign Exchange Management (non-debt instruments) (second amendment) Rules, 2021, applications for FDI in private banks having joint ventures or subsidiaries in the insurance sector may be addressed to the Reserve Bank of India for consideration in consultation with the Insurance Regulatory and Development Authority of India to ensure that the limit of foreign investment of 74 per cent for the insurance sector is not breached.

In May, the