The BJP led National Democratic Alliance (NDA) government Thursday increased the foreign direct investment (FDI) limit to 49 percent in the insurance sector.
Presenting his maiden union budget, Finance Minister Arun Jaitley said the government has decided to increase the FDI in insurance sector to 49 percent from the current 26 percent.
He said the insurance sector "is starved of funds".
An industry expert told IANS that the move will be beneficial mainly for the life insurers and not for the non-life insurers.
Hike in the FDI limit has been the long standing demand of the private insurance companies in India.
India opened up the insurance sector for private players in 2000, setting the cap on FDI at 26 percent.
