Future Perspective of FDI in Insurance Sector in India

Abstract

India’s insurance market has undergone numerous changes and is one of the fastest-growing markets today. The pandemic has sped up the industry’s rapid digitalization, reflected a rise in its demand, necessitated the development of new products, and more. Furthermore, the prospects show there have been disruptions owing to the extraneous factors that have led to the evolution of the industry itself. According to IRDAI, the sector has witnessed growth between 12 and 15 percent over a five- to six-year horizon.

India is a growing economy and attractive country to invest in different sectors, especially in its fast growing and developing insurance market. Indian insurance industry has a great growth potential. Foreign Direct Investment (FDI) plays an important role in the economic development of any country. However, Foreign Direct Investment (FDI) is released in the insurance industry, and after a long debate finally the limit of FDI has been increased up to 49% in insurance sector. Due to economic liberalization started in 1990’s FDI in India continuously increasing and most of the global firms shown keen interest in investing in India. This paper’s objectives are to investigate the Indian insurance industry and review current policy and regulations with a viewpoint of foreign investors so as to gain an understanding of the current position on FDI and to know the future prospective of the same in India.