Question
Download Solution PDFIn February 2022, the Union Cabinet permitted up to ______ foreign direct investment (FDI) under automatic route in Life Insurance Corporation of India (LIC).
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFThe correct answer is 20%.
Key Points
- In February 2022, the Union Cabinet permitted up to 20% foreign direct investment (FDI) under the automatic route in Life Insurance Corporation of India (LIC).
- The decision was made to facilitate foreign investment in the IPO-bound LIC.
- Prior to this decision, there was no specific provision for foreign investment in LIC under the automatic route.
- This move was aimed at making LIC's initial public offering (IPO) more attractive to foreign investors.
- The approval is part of broader efforts to liberalize FDI policies in the insurance sector.
Additional Information
- FDI in Insurance Sector
- The insurance sector in India has seen gradual liberalization, with the FDI cap being raised from 26% to 49% in 2015, and later to 74% in 2021.
- The increase in FDI limits aims to attract more foreign capital and enhance the growth of the insurance industry in India.
- Life Insurance Corporation (LIC)
- LIC is the largest insurance company in India, established in 1956.
- It has a significant market share and a vast network across the country.
- IPO (Initial Public Offering)
- An IPO is the process through which a private company offers its shares to the public for the first time.
- LIC's IPO is expected to be one of the largest in the history of Indian capital markets, aiming to raise substantial funds.
Last updated on Apr 24, 2025
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