Finance minister Nirmala Sitharaman has hinted that the Insurance Amendment Bill, which seeks to raise the foreign direct investment (FDI) limit in India’s insurance sector to 100%, could be placed before Parliament in the upcoming Winter session. The session usually begins in the second half of November and wraps up before Christmas.
Asked if the Bill would be introduced this year, Sitharaman replied, “I hope to.” The proposal, first announced in the Union Budget, is part of a broader plan to open up the financial sector and expand capital inflows.
At present, foreign ownership in insurance companies is capped at 74%. The new Bill proposes to lift it to 100% for firms that invest the entire premium within India. Regulatory guardrails and investment conditions are also set to be reviewed and simplified.
Since the sector was opened to foreign players, India has received around ₹82,000 crore in FDI. The government expects that a full opening will improve efficiency, ease business procedures, and support its long-term target of “Insurance for All by 2047.”
The Insurance Amendment Bill seeks to alter several provisions of the Insurance Act, 1938, including raising the FDI ceiling, lowering paid-up capital requirements, and introducing a composite licence. Related amendments are also being drafted for the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
For LIC, the proposed law would grant its board greater autonomy, including powers to take operational decisions such as opening branches and recruitment. The move marks a shift toward loosening central control over the country’s largest insurer.
India currently has 25 life insurance companies and 34 non-life or general insurers, including specialised entities like Agriculture Insurance Company of India Ltd and ECGC Ltd. Policymakers expect that increased foreign participation could intensify competition, expand coverage, and create new jobs.
FDI limits in insurance have been steadily raised over the years — from 26% to 49% in 2015, then to 74% in 2021. The proposed leap to 100% is seen as the next step in the government’s strategy to modernise the industry.
