Major Update on the Liberalization of India’s Insurance Sector: FDI Cap Raised to 100%
We are pleased to share an important development in the Indian insurance sector following the Honourable Finance Minister’s announcement on February 1, 2025. The Foreign Direct Investment (FDI) cap has been increased from 74% to 100%, marking a significant step in the liberalization of the industry.
Key Changes at a Glance:
- 100% FDI for Insurers Investing Premiums in India: The FDI increase will apply only to insurers who reinvest premiums back into India.
- Simplification of Foreign Investment Rules: Further regulatory simplifications are expected, although specific details are still unclear.
- Composite Licenses for Insurance Businesses Under Review: The possibility of unified licenses for life and non-life insurance businesses is still under consideration.
The next steps involve parliamentary approval and amendments to the Insurance Act of 1938 and operational regulations. While the exact timeline is still uncertain, we expect changes to occur within the current budget session.
We will continue to monitor these developments and keep you informed.