Cabinet Clears 100% FDI in Insurance; Bill Expected in Parliament Monday
the Insurance Laws (Amendment) Bill 2025, which seeks to deepen penetration, accelerate growth and development of the insurance sector and enhance ease of doing business, is part of the 13 legislations listed for the upcoming session of Parliament.
New Delhi: The Insurance Amendment Bill is learnt to have been cleared by the Union cabinet on Friday, and it is also expected that the bill will be introduced on Monday in the winter session of Parliament. The proposed bill, however, seeks to raise the foreign direct investment (FDI) cap in insurance companies to 100 per cent. The move of the government is seen as a step to boost capital inflows into the sector, according to the sources.
In her Budget speech this year, Union finance minister Nirmala Sitharaman had proposed to increase the foreign investment cap in the insurance industry from 74 per cent to 100 per cent as part of broader financial sector reforms. The change in the insurance sector is expected to attract significant foreign capital, increase competition, and enhance customer services in India’s insurance market.
According to a Lok Sabha bulletin, the Insurance Laws (Amendment) Bill 2025, which seeks to deepen penetration, accelerate growth and development of the insurance sector and enhance ease of doing business, is part of the 13 legislations listed for the upcoming session of Parliament.
Sitharaman had proposed to raise the foreign investment limit to 100 per cent from the existing 74 per cent in the insurance sector as part of new-generation financial sector reforms. “The enhanced limit will be available for those companies which invest the entire premium in India. The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified,” she had said.
“By removing the FDI cap, the government aims to unlock the full potential of the Indian insurance sector, which is projected to grow at 7.1 per cent annually over the next five years, outpacing global and emerging market growth,” Sitharaman told lawmakers earlier this year.