Finance Minister Nirmala Sitharaman during a debate in the Lok Sabha in New Delhi, on Monday | Photocredit: –
While the limit of the Foreign Direct Investment (FDI) in the insurance sector in the current parliament session must be increased, the government supplied the Lokha on Monday that only four insurance companies of the private sector have reached the current limit of 74 percent.
A written response from Minister of Finance Nirmala Sitharaman showed only four insurance companies – Ageas Federal Life Insurance, Aviva Life Insurance, Credit Access Life Insurance and Future Generali Life Insurance – have 74 percent of the BDI. No general insurance or independent health insurance policies has exhausted the entire BDI limit
“Section 2 (7a) (B) of Insurance Act, 1938, prescribes the upper limit of BDI in an insurance company. The decision to increase the BDI component in a certain insurance company is made by the promoters, depending on various factors such as capital requirement of the company, Solvencyan,”, Sitcaeist.
Reasons
With the reason behind the proposal to raise the BDI limit, she said that with the rise in the BDI limit, the full potential of the Indian insurance sector wants to unlock, which is expected to grow by 7.1 percent annually, which surpasses worldwide and emerging market growth. This is an engaging provision that will help the interested insurers to explore the DBI percentage.
“This will eliminate the need for foreign investors to find Indian partners for the remaining 26 percent, thereby facilitating the process of setting up their activities in India, which effectively increases the number of insurers in the country, she said. The removal of the BDI cap will increase stable and continuing The country, they added.
Published on July 28, 2025
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