India Opens Insurance Market to 100% Foreign Investment

The Union Cabinet has approved a bill to increase foreign direct investment (FDI) in India’s insurance sector to 100%. The proposal aims to deepen market penetration and drive economic growth. Amendments to key insurance legislation will support these reforms, with an emphasis on enhancing policyholders' interests and operational efficiencies.

The Union Cabinet has greenlit a proposal to elevate the foreign direct investment (FDI) limit in the insurance sector from 74% to 100%, sources revealed on Friday. This significant legislative move is expected to be introduced during the ongoing Winter session of Parliament, concluding on December 19.

The Insurance Laws (Amendment) Bill 2025, listed among 13 legislations for the session, seeks to deepen insurance penetration and facilitate ease of doing business. Finance Minister Nirmala Sitharaman's budget speech highlighted this amendment as part of broader financial sector reforms to spur growth and development in the insurance domain.

With existing foreign investment in the insurance sector summing to Rs 82,000 crore, the legislation aims at policyholder security, market efficiency, and increased competition. Key amendments to the Insurance Act 1938, including those affecting the Life Insurance Corporation Act and the Insurance Regulatory and Development Authority Act, underscore the government's commitment to achieving 'Insurance for All by 2047'.

(With inputs from agencies.)