India’s parliament approved a bill Thursday to open the insurance business to more foreign investment, The Wall Street Journal reported.
The easing of the rules is a key part of Prime Minister Narendra Modi’s plan to liberalize the Indian economy and improve investor confidence.
The bill raises the limit on foreign ownership of local insurance firms to 49 percent from 26 percent, replacing an executive order Modi passed in December that first brought this policy change.
That executive order needed to be approved by parliament to become permanent law. The lower house gave its approval last week, followed by the upper house Thursday.
It marks an important legislative victory for Modi, who has struggled to get opposition parties to back his key proposals, the report said.
The government hopes allowing more foreign investment in the insurance industry will attract more long-term capital into the business. Indians have one of the world’s lowest rates of insurance use.
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