Gov’t May Ease FDI Limits for Some Sectors

Posted by Reading Time: < 1 minute

May 27 – The newly-appointed government may look into liberalizing the entry of foreign direct investment in certain sectors like defense production and insurance as well as implement reforms on civil aviation policy, according to an official.

Currently, FDI is limited to 26 percent for both insurance and defense production. The UPA government in its previous tenure had introduced a bill in the Rajya Sabha for raising the FDI limit to 49 per cent in the insurance sector, reports The Economic Times.

Senior Cabinet Minister Kamal Nath said during a panel discussion on television: “I think there is some room … we can liberalize the defense sector … We need more capital in insurance. We should be looking at it. We will see how we frame it and structure it. We are all for getting in more capital in our insurance sector.”

In the aviation sector, although 49 percent FDI is allowed, foreign airlines have largely been not allowed to compete. Local airlines facing cash problems have been petitioning that the governmet allow FDI from foreign airlines.