Revolutionizing Insurance: Unprecedented FDI Expansion

The Finance Ministry has approved 100 percent foreign direct investment in the insurance sector under the automatic route. Insurance companies can now receive full foreign investment. However, the Life Insurance Corporation (LIC) remains limited to 20 percent. This change follows amendments to the insurance laws, passed in December 2025.

The Finance Ministry has officially notified that the insurance sector can now receive up to 100 percent foreign direct investment (FDI) under the automatic route. This significant move allows insurance companies and intermediaries, such as brokers, to attract full foreign investment. However, the Life Insurance Corporation (LIC) has a cap of 20 percent.

This development follows the Parliament's passage of the Sabka Bima Sabki Raksha Bill in December 2025, which amended insurance laws to permit a 100 percent FDI cap. Previously, the cap was set at 74 percent. With the President's assent, the Bill has been enacted into law.

The Department for Promotion of Industry and Internal Trade, part of the Commerce and Industry Ministry, confirmed the 100 percent FDI notification in February 2026. This policy shift aims to boost foreign investments and actively reshape the insurance landscape.