The Indian Parliament has passed a bill permitting foreign direct investment (FDI) of up to 100% in the insurance sector. The legislative change removes the earlier cap and allows foreign investors to hold complete ownership in insurance companies operating in India.
Under the previous framework, FDI beyond 74% required prior approval from the government. With the passage of the new law, foreign investment up to 100% is allowed without such approvals, enabling overseas entities to enter the Indian insurance market either through joint ventures or as wholly owned subsidiaries.
The revised policy framework is aimed at easing regulatory restrictions in the sector and facilitating greater participation by foreign insurers. The government has stated that regulatory supervision of the industry will continue to be exercised through the Insurance Regulatory and Development Authority of India (IRDAI).
The change in FDI norms applies across the insurance value chain and is expected to support wider participation, product availability, and operational expansion within the sector, while maintaining oversight through existing regulatory mechanisms.
Summary:
Parliament has cleared a bill raising the FDI limit in the insurance sector to 100%, removing the earlier approval requirement beyond 74%. The move allows full foreign ownership in insurance companies, with regulatory oversight to continue under IRDAI.
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