7 January , 2022 Fdiindia
DPIIT to Facilitate LIC Disinvestment with Amended FDI Policy: Secretary
Anurag Jain, secretary, Department for Promotion of Industry and Internal Trade (DPIIT), said that the commerce and industry ministry is revising the foreign direct investment (FDI) policy to smoothen the disinvestment process of India’s largest insurance firm, LIC.
The disinvestment process will be implemented under a modified FDI policy, the details of which will be decided upon considering the inputs from the finance ministry.
“We are working on further simplification of the FDI policy. A very important point for further simplification is required urgently as we have to do the LIC disinvestment. So, we would be coming out with a revised FDI policy which will facilitate LIC disinvestment,” he said.
The proposal is under consideration and currently being reviewed by the Department of Financial Services and the Department of Investment and Public Asset Management (DIPAM).
“The way our FDI policy reads as of now, it will cause a lot of issues for prospective investors, due to which it would be difficult to proceed with the disinvestment. We have had rounds of discussion and now we are all on the same page. So, we are in the process of drafting those changes in the FDI policy. Once we get cabinet approval, it will be known to all,” said Jain in a virtual press briefing.
As per the current FDI policy, 74 percent FDI is allowed under the automatic route for the insurance sector. However, the Life Insurance Corporation of India (LIC) is not covered under this policy and is managed through a separate LIC Act.
Since the LIC Act has no provisions for foreign investments, amendments are needed to accommodate the proposed LIC IPO (initial public offer) under SEBI (Securities and Exchange Board of India) norms to allow foreign investments.
Speaking about the e-commerce policy, Jain said, “The e-commerce policy "is finalised at my level and we have circulated that to other departments. Now we will have a higher level discussion... We will have discussions with departments on that and then we will finalize it...A lot of work has been done.”