Parliament passes bill to raise FDI to 100% in insurance sector
- IBEF
- December 18, 2025
The Indian Parliament recently passed legislation that will allow for foreign direct investment (FDI) in the insurance industry to reach a maximum of 100%, thereby permitting complete Indian ownership without any restrictions by the governmental authority. This change is intended to draw additional outer investment into India, improve competition, create increased opportunities for growth within the Indian insurance industry and expand markets within India. Under the prior rule, all foreign direct investments above 74% had to be approved by the Indian government. With the change in regulation that now allows for 100% foreign direct investment, the Indian insurance industry has fewer regulatory restrictions and thus will now encourage more foreign companies to invest in India on a larger scale, whether as a joint venture or as a wholly owned subsidiary.
The government hopes that this move will promote the growth of insurance products in all areas of the country, support technological advancements, and allow for greater distribution of insurance services in both urban and rural markets. Furthermore, it will promote innovation in insurance products and provide consumers with more options. According to experts, allowing 100% foreign direct investment (FDI) will encourage the establishment of new strategic alliances, additional investment into distributing products and services, and an increased emphasis on serving the underrepresented insurance consumers across the country. The government intends to maintain regulatory oversight through the Insurance Regulatory and Development Authority of India (IRDAI) and is committed to balancing liberalisation and financial security. Therefore, the increase in FDI limits has been viewed as a partially successful step forward in fostering confidence in investors to invest in the growth of the insurance sector, as well as contribute to the broader development of the economy as a whole.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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