Modi Budget Permits 100% FDI for insurance intermediaries

By Sarkaritel July 5, 2019 13:50

By TN Ashok

New Delhi, July 05 ( Government is contemplatoing  100% Foreign Direct Investment (FDI) for insurance intermediaries, Finance and Corporate Affairs MinisterMs . Nirmala Sitharaman said presenting the Union Budget 2019-20 in the Parliament today. She further proposed that Local sourcing norms will be eased for FDI in Single Brand Retail sector.

The Finance Minister also added that FDI inflows into India have remained robust despite global headwinds.  Global Foreign Direct Investment (FDI) flows slid by 13% in 2018, to US$ 1.3 trillion from US$ 1.5 trillion the previous year – the third consecutive annual decline.

The Finance Minister further stated that according to UNCTAD’s World Investment Report 2019.  India’s FDI inflows in 2018-19 remained strong at US$ 64.375 billion marking a 6% growth over the previous year.

The Finance Minister proposed to further consolidate the gains in order to make India a more attractive FDI destination:

a.       The Government will examine suggestions of further opening up of FDI in aviation, media (animation, AVGC) and insurance sectors in consultation with all stakeholders.

b.      100% Foreign Direct Investment (FDI) will be permitted for insurance intermediaries.

c.      Local sourcing norms will be eased for FDI in Single Brand Retail sector.

d.      FPIs will be permitted to subscribe to listed debt securities issued by ReITs and InvITs.

The Finance Minister further added that time has come that India not only gets integrated into global value chain of production of goods and services, but also become part of the global financial system to mobilise global savings,  mostly institutionalized in pension, insurance and sovereign wealth funds. Towards this end, the Government
is contemplating organizing an Annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as the anchor, to get all three sets of global players- top industrialists/corporate honchos, top pension/insurance/sovereign wealth funds and top digital technology/venture funds.

The Finance Minister stated that an important determinant of attracting cross-border investments is availability of investible stock to the FPIs. This issue assumes greater significance in view of the gradual shift, from stock targeted investments, towards passive investment whereby funds track global indices composition of which depends upon available floating stock.

By Sarkaritel July 5, 2019 13:50