India's Prime Minister Narendra Modi last Wednesday used an executive order known as an ordinance last week to raise the cap on foreign direct investment in the insurance industry to 49% from 26%. He made the decision after the winter session of parliament failed to pass the Insurance Amendment Bill – with minorities in the Upper House using delaying tactics to prevent the issue coming to a vote.
Finance minister Arun Jaitley had said on Wednesday that the cabinet had decided to take the executive order route.
An ordinance is valid only for six months; it must be voted on during the parliamentary session following the executive order. India's next session starts in late February.
On Friday India's President Pranab Mukherjee promulgated the insurance ordinance, as well as a coal ordinance that will provide legal backing for an auction of coal blocks which had been cancelled by the Supreme Court.
Press secretary Venu Rajamony said. "The ordinances demonstrate the firm commitment and determination of this government to reforms. It also announces to the rest of the world including investors that this country can no longer wait even if one of the houses of Parliament waits indefinitely to take up its agenda".