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India Opens Insurance Doors to Full Foreign Ownership
12 Dec, 2025
Summary
- Foreign ownership limit in Indian insurance companies raised to 100%.
- Bill to allow full foreign ownership expected in Parliament soon.
- Reforms aim to boost capital, competition, and policyholder protection.
The Union Cabinet has given the green light to a landmark decision enabling 100% foreign ownership in Indian insurance companies. This pivotal reform aims to attract substantial global capital, foster a more competitive market, and elevate customer service standards across the insurance sector. The anticipated Insurance Laws (Amendment) Bill 2025 is scheduled for presentation during the ongoing Winter session of Parliament.
Finance Minister Nirmala Sitharaman's proposal to increase the foreign direct investment limit from 74% to 100% is a key component of broader financial sector modernization efforts. Beyond the FDI hike, proposed changes include reducing paid-up capital requirements to ease market entry for new players and introducing a composite license system. These measures are intended to streamline operations and encourage innovation within the industry.
The government asserts that these comprehensive changes will bolster policyholder protection and stimulate market growth, potentially leading to better products and faster claim settlements. The reforms align with the national vision of achieving 'Insurance for All by 2047,' emphasizing increased competition, regulatory ease, and capital infusion as critical drivers for expanded insurance coverage nationwide.
