New Delhi: The Indian ministry of finance will soon be approaching the union cabinet with a proposal to hike the foreign direct investment (FDI) limit in insurance from the current 26 per cent to 49 per cent.

“We will soon be approaching the cabinet for its approval to move a bill in the parliament to amend the legal provisions to raise the insurance FDI to 49 per cent,” say officials The cap is part of the Insurance Regulatory and Development Authority Act, 1999.

The government had agreed on raising FDI caps for several other sectors including aviation, telecom and oil. Hiking the FDI limit has been a long-standing demand of foreign insurers who have partnered Indian companies in floating joint ventures in both life and non-life sectors.

Foreign partners have been mounting incessant pressure on the government to raise the cap to at least 49 per cent in the first stage of relaxation. Several of them have even expressed the hope that the limit would eventually be hiked to 51 per cent and above giving them a clear majority in the holding pattern.