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Limited appetite raises questions on insurance FDI growth projections

The article from Business Standard discusses the challenges and projections regarding Foreign Direct Investment (FDI) in India's insurance sector. Despite the government's efforts to increase FDI limits from 49% to 74% in 2021, the actual inflow of FDI has been underwhelming. The article highlights that while there was an initial surge in FDI post-liberalization, the growth has since stagnated, with only a marginal increase in FDI equity inflows from $1.1 billion in FY21 to $1.2 billion in FY23. Industry experts suggest that the limited appetite for FDI could be due to several factors including regulatory uncertainties, profitability concerns, and the high capital requirements for insurance businesses. There's also a noted preference among foreign investors for other sectors like fintech and digital lending, which promise quicker returns. The article raises questions about the effectiveness of policy changes in attracting substantial foreign investment into the insurance sector, suggesting that more comprehensive reforms might be necessary to truly stimulate growth.

Read the Full Business Standard Article at:
[ https://www.business-standard.com/economy/news/limited-appetite-raises-questions-on-insurance-fdi-growth-projections-124120800411_1.html ]