India proposes 100% FDI in insurance to boost sector growth and coverage

Economic Times
Economic Times
27m ago • 1 views
India introduced a bill to allow 100% FDI in insurance, aiming to expand coverage and improve sector regulation.
India proposes 100% FDI in insurance to boost sector growth and coverage
A What happened
The Sabka Bima Sabki Raksha Bill, 2025, seeks to amend the Insurance Act, Life Insurance Corporation Act, and IRDA Act to allow full foreign ownership in the sector. While opening opportunities for new players and capital, it retains domestic management control by requiring one top official be an Indian citizen. The bill also aims to establish a policyholders' protection fund, improve regulatory transparency, and simplify business operations. India’s insurance penetration has declined slightly recently, and the government views this as a critical step to accelerate growth, increase coverage, and create employment.
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Key insights

  • 1

    Balancing foreign investment with domestic control: The requirement that one top executive remain an Indian citizen reflects a compromise between attracting foreign capital and retaining strategic control over the insurance sector.

  • 2

    Policyholder protection as a regulatory priority: Establishing a dedicated policyholders’ protection fund signals a focus on consumer security alongside sector expansion.

  • 3

    Facilitating consolidation to stimulate sector growth: Allowing mergers between insurance and non-insurance firms could drive innovation, investment, and competition, reshaping the industry landscape.

Takeaways

India’s bill to raise FDI in insurance aims to accelerate sector growth and coverage while protecting domestic interests and policyholders. Its passage would mark a significant policy shift with broad economic implications.

Topics

Business & Markets Economy World & Politics Policy & Regulation