IAG has denied it is close to raising its stake in a major Indian general insurance operation.

Indian media reports claim the State Bank of India (SBI) has “started the process” to increase the Australian insurer's stake to 49% and will appoint a valuer to decide on the share price.

But an IAG spokesman told insuranceNEWS.com.au that while the option remains on the table, there have been no developments.

IAG owns 26% of SBI General. A rule change approved by India’s Parliament in 2015 allows foreign companies to increase stakes in insurers to 49%.

SBI General has a presence in 77 cities across India and employs about 2250 staff.