The government plans to review caps on foreign direct investment (FDI) in defence, insurance and plantations and it may also look at the processes that can be eased to streamline the regime, The Economic Times reported.
As the government seeks to move more manufacturing in the strategic sector to India, the department for promotion of industry and internal trade is looking at how investment norms for defence can be made more attractive, the report added.
Moneycontrol couldn't independently verify the report.
Current rules allow 100 percent FDI in the defence sector and this review comes amid India seeing FDI flows becoming stagnate.
Also Read | FDI inflows fall 3.5% to $44 billion in FY24
For insurance sector, FDI in a general or life insurance company is capped at 74 percent, while 100 percent FDI is allowed in insurance intermediaries. The review is on the cards even as there is sufficient competition in the sector, and a majority of life insurance companies are now profitable, the report stated.
In March this year, Financial Services Secretary Vivek Joshi said the insurance sector received close to Rs 54,000 crore as FDI in the last nine years on the back of further liberalisation of overseas capital flow norms by the government.
Officials told ET this review was meant to ensure smooth flows and the idea was also to ensure that timelines involving inter-ministerial processes were adhered to.
The total FDI, which includes equity inflows, reinvested earnings and other capital -- declined marginally by one percent to $70.95 billion during 2023-24 from $71.35 billion in 2022-23, data from Department for Promotion of Industry and Internal Trade (DPIIT) showed.
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