The government has introduced a landmark bill in the Lok Sabha to increase foreign direct investment (FDI) in India’s insurance sector to 100 percent. The move aims to attract global capital, enhance competition, and strengthen financial stability, while also overhauling regulatory norms to safeguard policyholders’ interests.
India’s insurance sector is set for a major transformation with the government’s proposal to allow full foreign ownership. The bill, tabled in the Lok Sabha, seeks to raise the FDI cap from the current 74 percent to 100 percent, marking a significant liberalization of the financial services industry. Officials emphasized that the reform is designed to boost capital inflows, expand insurance penetration, and modernize the sector in line with global practices.
Key highlights from the announcement include
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The bill proposes raising FDI in insurance companies to 100 percent, allowing complete foreign ownership.
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The reform is expected to attract substantial global capital, strengthening the solvency and competitiveness of insurers.
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Policyholder protection remains a priority, with enhanced regulatory oversight and stricter compliance norms.
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The move is aimed at expanding insurance penetration, particularly in underserved rural and semi-urban markets.
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Industry experts believe the reform will encourage innovation, digital adoption, and product diversification.
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The bill also seeks to overhaul liability and governance frameworks to align with international standards.
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The government expects the measure to create jobs, deepen financial inclusion, and support long-term economic growth.
This development underscores India’s commitment to opening up its financial services sector to global investors while balancing domestic interests. By allowing 100 percent FDI, the government aims to position India as a competitive insurance market, capable of meeting the needs of a rapidly growing economy and its diverse population.
Sources: Economic Times, Business Standard, Mint, NDTV, Reuters