Following her party’s major victory in national elections, Indian Finance Minister Nirmala Sitharaman presented the draft budget of Indian Prime Minister Narendra Modi’s government to the Indian Parliament. The draft budget includes proposed increases in permitted foreign investment in the insurance sector. Currently, foreign ownership in the sector is limited to 49%. Under the proposals, investments of up to 74% in insurers and reinsurers and 100% in insurance intermediaries (such as, insurance brokers, third party administrators, surveyors and loss assessors) may be approved.
In her remarks, the Finance Minister asserted that India’s economy is now the sixth largest in the world. Press reports indicate that the Indian economy continues to grow at a rate of approximately 7% and has a growing middle class.
For those willing to accept the challenge of entering this underdeveloped but potentially massive insurance market, opening the insurance sector to foreign investment and control may provide opportunities to offer insurance products and services in a growing market.