According to the Financial Services Secretary, Union Ministry of Finance Vivek Joshi, the insurance sector in India has received Rs 53,900 crore as foreign direct investment (FDI) in the last 9 years(December 2014 and January 2024). According to the Financial Services Secretary, 70 companies operate in the country's insurance sector.
What is Foreign Direct Investment
The terms ‘Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) have been defined in the Foreign Exchange Management Act (FEMA) 1999.
The FDI means investment made by a person resident outside India through capital instruments
(b) in ten per cent or more of the paid-up equity capital of a listed Indian company.
Foreign Portfolio Investment (FPI) is any investment made by a person resident outside India through capital instruments where such investment is less than ten per cent of the paid-up share capital of a listed Indian company.
Here, capital instruments mean shares (equity/preferential/warrant shares)and non-convertible debentures issued by an Indian company.
Almost every sector of the economy has been opened by the government of India for FDI except in the following sectors:
(i) Lottery business includes government/private lottery, online lotteries, etc.
(ii) Gambling and Betting, including casinos etc.
(iii) Chit funds
(iv) Nidhi Company
(v)Trading in Transferable Development Rights (TDRs)
(vi) Real Estate Business or Construction of Farm Houses: Real estate businesses shall not include the development of townships, construction of residential /commercial premises, roads or bridges, and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations 2014.
(vii) Manufacturing of cheroots, cigars, cigarillos, and cigarettes, of tobacco or of tobacco substitutes
(viii) Activities/sectors not open to private sector investment, e.g.(a) Atomic Energy and (b) Railway operations (other than permitted activities).
(ix)Foreign technology collaboration in any form, including licensing for franchise, trademark, brand name, or management contract, is also prohibited for Lottery Business, Gambling, and Betting activities.