Presenting her maiden budget at the Lok Sabha on Friday, Union Finance Minister Nirmala Sitharaman proposed relaxation in the foreign direct investment (FDI) norms for sectors such as media, aviation, insurance, and single brand retail with a view of attracting more overseas investment.
“I propose to further consolidate, the gains in order to make India more attractive FDI destination. The government will examine suggestions of further opening up of FDI in aviation, media, Animation, Visual Effects, Gaming, and Comics and insurance sector in consultation with stakeholders,” the finance minister said.
Currently, as per the FDI policy, 49 per cent foreign investment is allowed in the insurance sector, which includes insurance broking, insurance companies, third party administrators, surveyors and loss assessors.
It may be mentioned here that representations have been made to the government that insurance brokers should be treated on par with other financial services intermediaries, where 100 per cent FDI is permitted.
Insurance penetration in the country was 3.4 per cent in 2015 against the world average of 6.2 per cent. In 2014, it was 3.3 per cent in India.
“Similarly, 26 per cent FDI is permitted with government approval in the publishing of newspaper and periodicals dealing with news and current affairs; and publication of Indian editions of foreign magazines in news and current affairs,” she said.
Adding further the finance minister said that foreign investments are considered crucial for India, which needs around billions of dollars for overhauling its infrastructure sector such as ports, airports, and highways to boost growth.