Advantage India
Growing
Demand
*The AUM of the Indian MF Industry has grown from Rs. 9.16 trillion (US$ 110.63 billion) in 2014, to Rs. 64.97 trillion (US$ 780.70 billion) in July 2024, growing ~6x in a span of 10 years.
*Investment corpus in Indian insurance sector might rise to US$ 1 trillion by 2025.
*With >2,100 fintechs operating currently, India is positioned to become one of the largest digital markets with rapid expansion of mobile and internet.
Innovation
*India benefits from a large cross-utilization of channels to expand reach of financial services.
*Emerging digital gold investment options.
*In the Union Budget 2022-23 India announced plans for a Central Bank Digital Currency (CBDC) which will be known as Digital Rupee.
Policy
Support
*FDI sectoral cap in the insurance sector has been revised from 49% to 74% under the automatic route. The Union Budget 2025 also announced the further increase of FDI sectoral cap for the insurance sector from 74% to 100%. This enhanced limit will be available for those companies, which invest the entire premium in India.
*International Financial Services Centres Authority (Banking) Regulations, 2020, are expected to drive and facilitate the constituent operations in the IFSC and help the sector reach its potential.
Growing
Penetration
*Credit, insurance and investment penetration is rising in rural areas.
*HNWI participation is growing in the wealth management segment.
*Lower mutual fund penetration of 5-6% reflects latent growth opportunities.
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