The Indian finance ministry has issued a notification permitting 100% foreign direct investment (FDI) in insurance companies through the automatic route. This amendment, part of the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026, aligns with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. While foreign investment is now unrestricted in most insurance firms, it remains capped at 20% for the Life Insurance Corporation of India. Companies seeking to attract FDI must adhere to the provisions of the Insurance Act, 1938 and secure necessary licenses from the Insurance Regulatory and Development Authority of India (IRDAI). The new rules also extend the 100% FDI limit to insurance intermediaries, including brokers and third-party administrators, subject to IRDAI regulations. This move is expected to enhance foreign investment in the Indian insurance sector, promoting growth and competition.