Press Information Bureau

Government of India

Ministry of Finance

30-November-2012 15:30 IST

The Insurance Regulatory and Development Authority (IRDA) has informed that no foreign company is presently functioning in India. However, foreign companies are allowed as joint venture partners in the Indian insurance industry with a Foreign Direct Investment (FDI) cap of 26 per cent and at present 38 private insurance companies are functioning in India along with their joint venture partners.

This was stated by the Minister of State for Finance, Shri Namo Narain Meena in a written reply to a question in the Lok Sabha today.

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Foreign investment cap restricts equity to minority joint ventures in the insurance sector, shaping market participation and governance. Foreign participation in the Indian insurance sector is restricted to entry as joint venture partners with domestic firms, subject to a FDI cap of 26 per cent. No wholly foreign insurance companies operate in India; foreign entities must take minority equity positions within licensed private insurers to engage in the market, limiting governance influence and the scope of permitted foreign capital.