Union Finance Minister Ms. Nirmala Sitharaman whilst presenting the Union Budget 2019 on 5th July 2019, announced that 100% Foreign Direct Investment (‘FDI’) for insurance intermediaries will be permitted by the Government. The hike is an immense one since currently the FDI for insurance intermediaries stands at 49% under the automatic route. Insurance intermediaries include insurance brokers, insurance repositories, surveyors and loss assessors, third-party administrators as well as web aggregators like Policy bazaar. The 2019 budget also envisaged that the Government is also looking into the possibility of hiking the FDI limit in the insurance companies. However, there was no indication regarding the new cap that the Government would bring into effect.
It was also announced that local sourcing norms will be eased in single brand retail sector. At present, India allows 100% FDI in single-brand retail sector under the automatic route however, in the event of foreign investment beyond 51%, sourcing of 30% of the value of the goods purchased shall be from India, preferably from MSMEs, village and cottage industries etc.
The Government proposes to examine suggestions for further opening up of FDI in the aviation and media (animation and AVGC) sectors in consultation with all stakeholders. Currently, 26% FDI in publishing of newspapers and periodicals involved with news and current affairs is permitted through the approval route, while in aviation, foreign carriers are permitted to own 49% in Indian carriers, either directly or indirectly.