Indian Economy News

Raising FDI limit in insurance aimed at unlocking full potential of sector: Union Minister of Finance Ms. Nirmala Sitharaman

  • IBEF
  • July 29, 2025

Union Minister of Finance Ms. Nirmala Sitharaman informed Parliament that increasing the Foreign Direct Investment (FDI) limit in the insurance sector to 100% is projected to boost annual growth to 7.1% over the next five years, surpassing global growth rates. This measure, proposed in the Union Budget 2025-26, raises the previous limit from 74% and simplifies foreign entry by eliminating the requirement for Indian partners for the remaining 26%. The move is expected to attract stable and sustained foreign investment, enhance competition, facilitate technology transfer, and significantly improve insurance penetration across the country. The decision to increase FDI within a specific insurance company remains at the discretion of its promoters, contingent on factors such as capital requirements, solvency, and future business strategies. 
In response to another query, she detailed ongoing efforts to expand coverage under critical social security schemes, namely Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), and Atal Pension Yojana (APY). These schemes are being promoted through regular grassroots campaigns, involving active participation from banks and local administrations. Furthermore, a three-month 'Financial Inclusion Saturation Campaign' commenced on July 1, 2025, encompassing 2.70 lakh Gram Panchayats and Urban Local Bodies (ULBs) nationwide to boost enrolments. Camps are being organised at the Gram Panchayat and ULB levels by banks, offering direct access to information and assistance for scheme enrolment, with 2,421 Centres for Financial Literacy (CFLs) established as of March 31, 2025, each covering approximately three blocks.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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