Union Budget 2019: Govt proposes FDI norm relaxation in media, aviation, insurance, single brand retail

New Delhi: The government on Friday proposed relaxation in the FDI norms for sectors such as media, aviation, insurance, and single brand retail with a view to attract more overseas investment.

Finance Minister Nirmala Sitharaman in her Budget speech said that India's FDI inflows in 2018-19 grew by 6 per cent to $ 64.37 billion.

"I propose to further consolidate, the gains in order to make India more attractive FDI destination. The government will examine suggestions of further opening up of FDI in aviation, media, AVGC (Animation, Visual effects, Gaming and Comics) and insurance sector in consultation with stakeholders," she said.

 Union Budget 2019: Govt proposes FDI norm relaxation in media, aviation, insurance, single brand retail

Representational image. News 18.

The minister said 100 percent foreign direct investment (FDI) will be permitted for insurance intermediaries, and local sourcing norms will be eased for FDI in the single brand retail sector.

Currently, as per the FDI policy, 49 percent foreign investment is allowed in the insurance sector, which includes insurance broking, insurance companies, third party administrators, surveyors and loss assessors.

Representations have been made to the government that insurance brokers should be treated on par with other financial services intermediaries, where 100 percent FDI is permitted.

Insurance penetration in the country was 3.4 percent in 2015 against the world average of 6.2 percent. In 2014, it was 3.3 percent in India.

Similarly, 26 percent FDI is permitted with government approval in the publishing of newspaper and periodicals dealing with news and current affairs; and publication of Indian editions of foreign magazines in news and current affairs.

Foreign investments are considered crucial for India, which needs around billions of dollars for overhauling its infrastructure sector such as ports, airports and highways to boost growth.

FDI helps improve the country's balance of payments situation and strengthen the rupee value against other global currencies, especially the US dollar.

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Updated Date: Jul 05, 2019 16:59:38 IST