Parliament Clears 100% FDI in Insurance Sector
Parliament has approved a major reform allowing 100 per cent foreign direct investment (FDI) in India’s insurance sector, raising the existing cap of 74 per cent. The decision was taken through amendments to insurance-related laws with the objective of expanding capital availability, strengthening the sector, and improving insurance coverage across the country.
Aim to Boost Insurance Coverage by 2047
The government said the move is aligned with its long-term goal of achieving insurance for all by 2047, coinciding with the centenary of India’s Independence. Higher foreign investment is expected to support deeper penetration of insurance products, especially in underserved and rural areas, while also helping insurers expand distribution networks and improve service delivery.
Changes to Regulatory Framework
The legislation amends key laws governing the insurance industry to accommodate the revised FDI limit and modernise regulatory oversight. Officials said the updated framework will improve ease of doing business while maintaining safeguards for policyholders. Regulatory authorities will continue to supervise ownership structures, solvency requirements, and consumer protection norms.
Industry and Economic Impact
Industry experts believe the move will attract long-term global capital, advanced technology, and international best practices into the Indian insurance market. The reform is expected to increase competition, encourage innovation in insurance products, and support job creation across the sector. Existing insurers may also gain greater flexibility to raise funds for expansion.
Way Forward
The government said implementation will be phased and closely monitored to ensure stability and consumer protection. With Parliament’s approval, India’s insurance sector is set for a significant transformation aimed at supporting inclusive economic growth.
