IRDAI chairman Debasish Panda is pitching for 100% foreign direct investment (FDI) in the insurance sector, saying a huge amount of capital is needed to achieve the goal of 'Insurance for All by 2047'.
Speaking at an annual event of the business daily, Business Standard, Mr Panda said that insurance is a capital-intensive sector, and the country would need more players in the segment to increase insurance penetration, reported Press Trust of India.
India opened up the insurance sector by allowing private and foreign investments in 2000. At that time, the FDI ceiling was 26%. The cap was raised to 46% in 2015 and 74% in 2021 and has stayed at this level since then.
In an interview with Business Standard, Mr Panda was asked when the insurance industry would see 100% FDI in the insurance sector.
He replied, “When we are talking about ‘Insurance for All by 2047’, obviously we need a lot of capital, which means we need a lot of new entities to come in. Some consolidation may also happen. If the FDI route is also opened, that will just augment the domestic investment; otherwise, the domestic investment may get crowded.
“Perhaps it is time to open up the insurance sector to 100% FDI so that there could be more players who want to come to India to operate on their own terms without trying to look for an Indian partner. If somebody comes in at 74-26, that is also fine. But opening up the sector to 100% FDI will attract more investments to come into the country.”