The Government Is Preparing To Change The FDI Policy

The government is preparing to change the FDI policy, before the launch of LIC’s IPO. The government has intensified efforts for the privatization of LIC.

In this sequence, the Ministry of Commerce and Industry is preparing to make changes in the Foreign Direct Investment (FDI) policy to ease the disinvestment process of the LIC.

A top government official gave this information.

Anurag Jain, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), said the current policy on the sector will not make LIC’s disinvestment process easy.

Hence it needs to be amended.

He said that we are working on easing the FDI policy further. This significant change is urgently needed as we have to disinvest LIC.

Keeping this in mind, we are bringing a revised FDI policy, which will ease the disinvestment process of LIC.

This is being discussed with the Department of Financial Services and the Department of Investment and Public Asset Management (DIPAM).

Jain said that there have been two more rounds of discussion at our level and there is an agreement on this in DPIIT, DFS (Department of Financial Services), and DIPAM.

We are in the process of drafting the necessary changes in the FDI policy and will send it to the Cabinet for approval.

The government is preparing to change the FDI policy: As per the current FDI policy, 74% of foreign investment is allowed in the insurance sector under the automatic route.

However, these rules do not apply to the Life Insurance Corporation of India, which is managed through a separate LIC Act.

The Cabinet had approved the initial public offering (IPO) of LIC in July last year and the company’s stake sale is being planned for the January-March 2022 quarter.

Regarding the pending e-commerce policy, the Secretary said that DPIIT is in the final stages of completing the e-commerce policy and the National Retail Trade Policy.