The Union Cabinet-headed by Prime Minister Narendra Modi last week approved the Insurance Laws (Amendment) Bill, 2008 with a composite foreign investment cap of 49 percent, incorporating the changes suggested by a House panel.

The Select Committee in its report to the Rajya Sabha had suggested hike in composite foreign investment limit in insurance sector to 49 percent which would include Foreign Direct Investment (FDI) as well as portfolio investment.

Currently only 26 percent FDI is allowed in private sector insurance companies.

“The Committee recommends that the composite cap of 49 percent should be inclusive of all forms of foreign direct investment and foreign portfolio investments,” the report said.

With the Winter Session of Parliament due to conclude early next week, sources said while
Congress has announced support for the insurance bill, it feels that it is up to the government to deal with other parties opposing the reforms. 

The bill, which has been pending since 2008, may not have a smooth ride in the Rajya Sabha with certain political parties opposing further opening of the insurance sector to foreign investment.

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