Govt To Review FDI Policies In Defence, Insurance, And Plantations Sectors

New Delhi, Jul 8 (KNN) The Indian government is reportedly planning to review foreign direct investment (FDI) limits in several key sectors, including defence, insurance, and plantations.

This review aims to potentially streamline the investment regime and enhance its attractiveness to foreign investors, according to a recent report by ET.

The Department for Promotion of Industry and Internal Trade is reportedly examining ways to make investment norms more appealing in the defence sector, as part of the government's broader strategy to boost domestic manufacturing in strategic industries. Currently, 100 per cent FDI is permitted in the defence sector.

In the insurance sector, where FDI is presently capped at 74 per cent for general and life insurance companies and 100 per cent for insurance intermediaries, the government is considering a review despite the sector's current profitability and competitive landscape.

Financial Services Secretary Vivek Joshi recently noted that the insurance sector had attracted approximately Rs 54,000 crore in FDI over the past nine years, following liberalisation of overseas capital flow regulations.

Sources within the government indicated to The Economic Times that this review is intended to ensure smooth investment flows and adherence to inter-ministerial process timelines.

The move comes as India's total FDI inflows, including equity inflows, reinvested earnings, and other capital, experienced a marginal decline of 1 per cent to USD 70.95 billion in the 2023-24 fiscal year, down from USD 71.35 billion in the previous year, according to data from the Department for Promotion of Industry and Internal Trade.

This comprehensive review of FDI policies in key sectors signals the government's proactive approach to maintaining India's appeal as a destination for foreign investment amid global economic challenges.

(KNN Bureau)