Revamping India's Insurance Landscape: FDI and Accessibility Boost

Finance Minister Nirmala Sitharaman announced major insurance reforms aimed at increasing foreign direct investment, regulatory oversight, ease of compliance, and accessibility. The proposed bill seeks to raise the FDI cap to 100%, enhancing insurance penetration and transparency. Government schemes like PM Fasal Bima Yojana have extended coverage to underserved populations.

Finance Minister Nirmala Sitharaman has announced a groundbreaking insurance reform bill in Parliament, poised to transform the sector. The proposed legislation, The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, aims to enhance transparency, boost foreign direct investment (FDI), and simplify compliance within the industry.

In what is a bold move for the sector, the bill seeks to elevate the FDI limit from its previous benchmark, allowing up to 100% foreign investment. This change is expected to invigorate the insurance landscape, pushing the number of insurers from 53 in 2014 to 74 currently, while setting the stage for further growth.

The minister underscored the significance of insurance penetration, which has seen a modest rise since 2014, and highlighted the expansion of coverage through government initiatives like the PM Fasal Bima Yojana. This reform is viewed as a catalyst for greater access and financial security among the populace.

(With inputs from agencies.)