Seeking to attract more foreign investment, the government has relaxed FDI norms for insurance sector by permitting overseas companies to buy 49 per cent stake in domestic insurers without prior approval.
Currently, FDI up to 26 per cent is permitted through automatic approval route. For FDI up to 49 per cent, the approval of Foreign Investment Promotion Board is required.
"The foreign investment proposals up to 49 per cent of the total paid up equity of the Indian insurance company shall be allowed on the automatic route subject to verification by the Insurance Regulatory and Development Authority of India," said a Government notification.
There are 52 insurance companies operating in India, of which 24 are in the life insurance business and 28 in the general insurance.
During April-December 2015, FDI into the country grew by 40 per cent to USD 29.44 billion.
