Kathmandu. The Government of India is preparing to bring a relaxed provision for the appointment of foreign nationals as members of the board of directors along with 100 percent FOREIGN direct investment (FDI) in insurance companies.
The Government of India is going to introduce a provision to appoint foreign investors as board members of insurance companies after increasing the existing FDI in the insurance sector from 74 percent to 100 percent. This has been one of the main demands, especially from the U.S. government and the U.S. insurance industry. Both the US Trade Representative (USTR) and the Coalition of Services Industries (CSI), who recently visited India, had referred the case.
A senior Indian government official said that the insurance bill has already been prepared with a provision regarding 100 percent foreign investment in insurance and appointment of foreign nationals as board members. “The amended bill is likely to be tabled in the upcoming monsoon session of Parliament,” the official said.
According to the official, the provision regarding the appointment of foreign investors has been made flexible. “We don’t mind if an American citizen or a foreign professional plays the role of a leader,” the official said.
Foreign insurance companies are already fully regulated through insurance regulator IRDAI. These revenges will not have any major impact on their business or structure, the official said.
Indian officials say the reform in the insurance bill is not aimed at opening the door to foreign control but to welcome global participation in the leadership role. “Once there are foreign nationals in the leadership, the companies will depend on Indian professionals,” they said.
Indian professionals are working in many countries such as the US and the UK. “We are confident that they will return to India after the amendment in the insurance bill,” the official said, adding, “Our main objective is to create a conducive investment opportunity in foreign insurance companies operating in India.” ’
India’s Finance Minister Nirmala Sitharaman had announced in the budget speech that the foreign direct investment limit in the insurance sector will be increased to 100 percent. This limit will be available for companies who will invest the entire premium in India.
In 2021, the foreign investment limit in the insurance sector in India was increased from 49 percent to 74 percent. After that, preparations are being made to increase it to 100 percent.
