Parliament Clears 100% FDI in Insurance Sector, Boosting Capital
Parliament Clears 100% FDI in Insurance Sector, Boosting Capital
India moves to raise the FDI cap in insurance to 100%, aiming to attract global insurers, expand coverage, and strengthen regulatory oversight.
The Parliament has cleared the Sabka Bima Sabki Raksha Bill, a landmark reform that raises the foreign direct investment cap in the insurance sector to 100%. This change is expected to bring substantial capital from global insurers directly into the Indian market, without the need for locating Indian partners. The move is aimed at expanding insurance coverage across the country while ensuring compliance with all existing laws.
Finance Minister Nirmala Sitharaman told the Lok Sabha that removing the 74% cap will allow international players to enter more directly, bringing in capital and expertise while maintaining Indian regulatory standards. She emphasized that the reform is designed to improve access to insurance and strengthen the sector's overall framework.
Key features of the Sabka Bima Sabki Raksha Bill include a policyholders education and protection fund to spread awareness and safeguard dues, stronger regulatory oversight to ensure orderly and transparent conduct, and a one-time registration system for insurance intermediaries to ensure uninterrupted service to citizens. The government says these steps will promote ease of doing business for service providers and reduce regulatory delays. Separately, decisions earlier this year by the GST Council removed the 18% GST on individual health and life insurance premiums, a move the government says will boost insurance penetration.
With passage in Parliament and awaiting President's assent, the reform is expected to attract global capital, enhance risk management, and expand insurance access for millions of Indians, while keeping a close eye on consumer protection and market integrity.
