INDIA’S FOREIGN EQUITY CAP PROGRESS

PLANS to allow foreign insurers to own more than 26% of Indian insurance companies could finally be a step closer after a decision by the country’s cabinet. The ownership cap has been a thorny issue for the Indian authorities and the international insurance community. The failure to make progress has been blamed for the lack of wider international involvement in the Indian insurance market. India’s cabinet has now approved legislation that would allow foreign insurers to hold a stake of up to 49% in local insurers. The next step is for the government to introduce the proposal in the Indian parliament. It is seen as a strategy to increase foreign investment in India at a time when confidence is low. According to a Bloomberg report, overseas investors have sold as much as $12.7bn of Indian equities this year, having bought a record $17.2bn last year.