Image Source : KNN India
The Union Cabinet approved the Insurance Amendment Bill 2025, raising the foreign direct investment (FDI) cap from 74% to 100% under automatic route. This move aims to inject fresh capital, boost competition, modernize the sector, and support India's $250B+ insurance market growth amid rising penetration needs.
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The decision fulfills long-standing industry demands, allowing foreign insurers complete ownership without government approval. Previously capped at 74% since 2021, the hike removes barriers for global players like Allianz and AXA to expand fully, potentially accelerating underwriting capacity and tech adoption in life/health segments.
Key Highlights
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FDI Surge: Automatic route up to 100% FDI, no prior nod needed beyond 74%.
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Capital Infusion: Expected ₹50,000+ crore inflows to strengthen solvency margins.
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Market Impact: Enhances competition, lowers premiums, widens coverage in underserved areas.
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IRDAI Oversight: Regulator maintains control over licensing, product approvals.
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Economic Goal: Aligns with Viksit Bharat vision for $1T insurance premium by 2047.
Source: Press Information Bureau (PIB), Finance Ministry announcement
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