FDI in Insurance
FDI hike to boost insurance ops, up mkt players, improve cover - Fin min
This story was originally published at 15:23 IST on 28 July 2025
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NEW DELHI – Hiking the foreign direct investment limit in insurance companies to 100% will help attract stable and sustained foreign investment, increase competition, facilitate technology transfer, and improve insurance penetration in the country, Finance Minister Nirmala Sitharaman said Monday. In the Budget for 2025-26 (Apr-Mar), she had proposed the FDI limit for the insurance sector be raised to 100% from 74%.
"With the increase in FDI limit from 74% to 100% for insurance companies, the government aims to unlock the full potential of the Indian insurance sector, which is projected to grow at 7.1% annually over the next five years, outpacing global and emerging market growth," Sitharaman said in a written response to the Lok Sabha.
This increase in FDI limit in the insurance sector will be rolled out once the Insurance Amendment Bill is cleared by Parliament.
In her response, Sitharaman also said that the hike in FDI limit will eliminate the need for foreign investors to find Indian partners for the remaining 26%, easing the process of setting up their operations in India, effectively increasing the number of insurers in the country.
According to data from the Insurance Regulatory and Development Authority of India, the total foreign equity share capital in 19 life insurance companies was 47.82% as of December 2024. Of these 19 life insurers, Ageas Federal Life Insurance Co. Ltd., Aviva Life Insurance Co. Ltd., Credit Access Life Insurance Ltd., and Future Generali Life Insurance Co. Ltd. have foreign share capital of 74%, which is the current limit.
Similarly, the total foreign equity share capital in 15 private sector general insurers was 40.80% and 29.46% in health insurers, as of December 2024. End
Reported by Priyasmita Dutta
Edited by Tanima Banerjee
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