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Abstract
For a developing country like India, Foreign Direct Investment (FDI) is considered as new striking features of development during the last two decades to accelerate the spectacular growth and economic activities in Indian context. The 21st century has made the world as one of the most extraordinary, transparent, vibrant, liberal and interdependent world economic order where FDI insurance are used to bridge the gap between domestic savings and investments among the emerging and developing economies. The role of FDI in present insurance context is noteworthy to mobilize national savings and channelize them into investment into different sectors of economy. FDI in insurance would increase the transmission of insurance to meet India’s long term capital requirements to finance and building of infrastructures. Despite many years of parliamentary debate, the present NDA Government getting a green signal to pass the Insurance Laws (Amendment) Act, 2015 seek to increase the cap on FDI in the insurance sector from 26% to 49% but the regulations have still lots of restrictions and plethora of uncertainties. This research paper’s objectives are to explore the cost of FDI in insurance, know the reasons behind the urgent needs to attract more FDI, major reforms and overview of the policy and regulatory environment. This study tries to conclude that increase of FDI is no doubt an optimistic move for the future development and hence this sector need huge amount of capital investment which can be done effectively in present scenario.