74% FDI Limit for Indian Insurance Companies Operationalized

Our undertakings for long-term impact are an organic extension of our purpose.

They are to employ our deep knowledge of the law beyond the business, the transaction, the deal. To use the opportunities and skills we possess, to reflect on the culture we’re creating. Individually and collectively, these are our efforts to help shape the thinking of our future generations, and arm them with strategies for true, sustainable growth.

Sep 30, 2021

74% FDI Limit for Indian Insurance Companies Operationalized

The increase in the foreign investment limit for Indian insurance companies from 49% to 74% stands fully operationalized as of August 19, 2021, by virtue of the Foreign Exchange Management (Non-Debt Instruments) (Second Amendment) Rules, 2021 being notified on August 19, 2021, which amended the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. A summary of the key amendments issued in this regard are as follows:

i. Amendments to the (Indian) Insurance Act, 1938, came into force on April 1, 2021, increasing the foreign investment limit to 74% and removing the ‘Indian owned and controlled’ requirement. Please follow the link for more details in this regard;

ii. The Indian Insurance Companies (Foreign Investment) Amendment Rules, 2021 were notified on May 19, 2021, by the Ministry of Finance, Government of India, which amended the Indian Insurance Companies (Foreign Investment) Rules, 2015; and

iii. The IRDAI issued a Circular on July 30, 2021, withdrawing the Guidelines on Indian owned and controlled dated October 19, 2015.

DISCLAIMER

These are the views and opinions of the author(s) and do not necessarily reflect the views of the Firm. This article is intended for general information only and does not constitute legal or other advice and you acknowledge that there is no relationship (implied, legal or fiduciary) between you and the author/AZB. AZB does not claim that the article's content or information is accurate, correct or complete, and disclaims all liability for any loss or damage caused through error or omission.