Lok Sabha clears bill to raise FDI limit to 74 per cent in insurance sector

The Insurance (Amendment) Bill, 2021 seeks to raise the current foreign direct investment limit to 74 per cent from the current 49 per cent. The bill was passed by the Rajya Sabha on Thursday.

New Delhi: The Lok Sabha on Monday approved a bill to raise the foreign direct investment limit in the insurance sector to 74 per cent with Finance Minister Nirmala Sitharaman saying the bill will help domestic insurance companies that are facing liquidity issues due to Covid-19 pandemic.

The Insurance (Amendment) Bill, 2021 seeks to raise the FDI limit from the current 49 per cent to 74 per cent, said the Finance Minister while introducing the bill in the house.

By raising the FDI limit to 74 per cent, the current provision of control being vested with Indian companies had to be dropped.

During the discussion on the bill, Congress MP Manish Tiwari opposed the bill saying it will jeopardise the interests of millions of policyholders as the Indian insurance companies will be controlled by foreign insurance behemoths.

On the other hand, BJP MP Jagadambika Pal supported the bill He said that the bill will help in improving insurance penetration in the country.

The bill, which was passed by the Rajya Sabha Thursday by voice vote after opposition Congress and other parties staged a walkout in protest of the bill.

Once it gets the approval of the President of India, the bill will become an Act.