Finance Minister Arun Jaitley today hiked foreign investment limit in defence and insurance sectors. India is the biggest buyer of defence equipment in the world.
Foreign direct investment (FDI) in defence manufacturing has been hiked from 26 per cent to 49 per cent. The ownership of such joint ventures will stay with Indian companies, Mr Jaitley said.
FDI in insurance sector will be hiked to 49 per cent from 26 per cent, the FM said. The domestic insurance sector has not been able to flourish for the lack of adequate investments.
Shares in insurance companies had run up sharply ahead of Budget on hopes that Mr Jaitley will raise FDI limit. Over the last three months, Reliance Capital is up nearly 70 per cent, while Max India is up 51 per cent.
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