India Allows 100% Foreign Direct Investment in Insurance Sector
Finance Ministry notifies 100% FDI in insurance sector, amends Fema rules
Business Standard
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The Indian Finance Ministry has officially notified a 100% foreign direct investment (FDI) cap in the insurance sector under the automatic route. This change follows the passage of the Sabka Bima Sabki Raksha Bill, which increased the FDI limit from 74% to 100% for insurance companies and intermediaries, with a specific cap of 20% for the Life Insurance Corporation.
- 01The Finance Ministry has implemented 100% FDI in the insurance sector.
- 02The FDI cap for the Life Insurance Corporation is set at 20%.
- 03This decision follows the passage of the Sabka Bima Sabki Raksha Bill in December 2025.
- 04The change allows foreign investment in insurance companies and brokers under the automatic route.
- 05The Department for Promotion of Industry and Internal Trade notified this amendment in February 2026.
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The Finance Ministry of India has notified a significant policy change allowing 100% foreign direct investment (FDI) in the insurance sector through the automatic route. This decision follows the December 2025 passage of the Sabka Bima Sabki Raksha Bill, which raised the FDI limit from 74% to 100% for insurance companies and intermediaries, including brokers. However, a specific cap of 20% has been established for the Life Insurance Corporation (LIC). The amendment was subsequently notified by the Department for Promotion of Industry and Internal Trade (DPIIT) in February 2026, marking a pivotal shift in India's insurance landscape, aimed at attracting more foreign investments.
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This policy change is expected to enhance foreign investment in India's insurance sector, potentially leading to more competitive insurance products and services for consumers.
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