New Era for Insurance: FDI Raised to 100%

Parliament has approved a bill to increase foreign direct investment (FDI) in the insurance sector to 100%, up from the current cap of 74%. The Sabka Bima Sabki Raksha Bill, 2025, is expected to boost insurance penetration, reduce premiums, and enhance job opportunities. It will also bring about regulatory changes and support foreign company entry.

In a landmark move to bolster the insurance sector, Parliament on Wednesday passed a bill that raises foreign direct investment (FDI) in the sector to 100% from 74%. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, was approved by a voice vote in the Rajya Sabha, shortly after clearing the Lok Sabha. The decision is set to enhance insurance penetration, reduce premiums, and foster job creation.

In the face of opposition amendments, Finance Minister Nirmala Sitharaman addressed the Parliament, highlighting the long-standing consultation process and refuting charges of hastiness. She emphasized how opening the sector will allow foreign entities to pour in much-needed capital, spurring competition and driving down premium costs, thus benefiting policyholders and the economy alike.

The bill introduces several key reforms, including establishing a Policyholders' Education and Protection Fund and setting out new provisions for the merger of non-insurance and insurance companies. This development represents a strategic shift aimed at strengthening regulation, ensuring better policyholder protection, and fostering a competitive, transparent business environment in India's insurance landscape.

(With inputs from agencies.)