100% FDI in insurance okayed

In a bid to expand insurance penetration in the country, the Union Cabinet on Friday approved a Bill to raise foreign direct investment (FDI) in the insurance sector to 100 per cent, sources said.

The Bill may be introduced in the ongoing Winter session of Parliament, which is slated to conclude on December 19.

According to a Lok Sabha bulletin, the Insurance Laws (Amendment) Bill 2025, which seeks to deepen penetration, accelerate growth and development of the insurance sector and enhance ease of doing business, is part of the 13 legislations listed for the ongoing session of Parliament. The Insurance Laws (Amendment) Bill, 2025, may be introduced in Parliament on Monday, sources said.

Finance Minister Nirmala Sitharaman, in this year’s Budget speech, proposed to raise the foreign investment limit to 100 per cent from the existing 74 per cent in the insurance sector as part of new-generation financial sector reforms. So far, the insurance sector has attracted Rs 82,000 crore through FDI.

The Finance Ministry has proposed amending various provisions of the Insurance Act, 1938, including raising FDI in the insurance sector to 100 per cent, permitting the merger of a non-insurance company with an insurance company, and creating a dedicated policyholder fund.

Commenting on the proposed legislation, Aditya Birla Sun Life Insurance MD and CEO Kamlesh Rao said the move might encourage more global players to explore India, translating that interest into meaningful scale would depend on how effectively new entrants could navigate this distribution landscape.

— With agency inputs