India Approves 100% FDI in Insurance Sector

India's Parliament has approved legislation to allow full foreign direct investment in the insurance sector, marking a significant liberalization aimed at boosting capital inflows and expanding coverage nationwide.

The Sabka Bima Sabki Raksha Amendment of Insurance Laws Bill, 2025, cleared the Lok Sabha on Tuesday and the Rajya Sabha on Wednesday through a voice vote. The measure raises the foreign direct investment cap from 74 percent to 100 percent, amending the Insurance Act of 1938, the Life Insurance Corporation Act of 1956, and the Insurance Regulatory and Development Authority Act of 1999. It also permits mergers between non-insurance companies and insurance firms, streamlines share transfer approvals by raising the threshold for regulatory consent from 1 percent to 5 percent of paid-up equity capital, and introduces one-time registration for insurance intermediaries to enhance operational efficiency.

Union Finance Minister Nirmala Sitharaman, who introduced the bill, emphasized its role in attracting stable foreign capital and technology to deepen insurance penetration. "The opening of the sector has helped in increasing penetration of insurance in the country, and there...