India’s Finance Minister has raised the FDI limit in insurance to 100%, allowing global players to enter without local partners. The Insurance Amendment Bill, passed in Lok Sabha, aims to boost capital inflows, deepen penetration, and modernize the sector with simplified regulations and local investment mandates.
India’s Finance Minister announced a landmark reform, raising the Foreign Direct Investment limit in the insurance sector from 74% to 100%. This move, formalized through the Insurance Amendment Bill tabled in Lok Sabha on December 16, 2025, will allow global insurers to operate independently in India without local partners, paving the way for substantial capital inflows and enhanced sector growth.
The proposed changes are part of a broader legislative overhaul aimed at deepening insurance penetration, improving business ease, and fostering competition. The new policy mandates that insurers with 100% foreign ownership must invest all premiums collected within India, ensuring local capital deployment while permitting dividends to be remitted abroad. The government also plans to simplify regulatory processes and lower paid-up capital requirements, making entry and operations smoother for global players.
Notable Updates & Major Takeaways:
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The FDI cap in insurance has been increased to 100%, enabling full foreign ownership.
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All premium collections from Indian policies must be invested locally, but profits can be repatriated.
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The Insurance Amendment Bill is part of a suite of reforms to boost penetration, attract global capital, and modernize the sector.
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The bill also proposes rationalizing merger procedures and easing operational norms for insurers.
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Amendments will be made to the Insurance Act, 1938, and related legislation to support these changes.
Sources: The Economic Times, The Hindu, Press Information Bureau, Moneycontrol