New Delhi, Feb 1 (UNI) Finance Minister Nirmala Sitharaman on Saturday announced that the FDI limit would be raised from 74 percent to 100 percent for insurance sector companies which invest their entire premium in India.
Presenting the Union Budget 2025-26 in the Lok Sabha, Sitharaman said, "The FDI limit for the insurance sector will be raised from 74 to 100 percent. This enhanced limit will be available for those companies which invest the entire premium in India".
"The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified" he added.
The move will help in paving the way for the entry of global insurance giants, substantial foreign investments and tough competition in the Indian insurance market.
Reacting over the decision Sharad Mathur, Managing Director and CEO, Universal Sompo General Insurance said “The increase in the foreign direct investment (FDI) limit from 74% to 100% in the insurance sector is another significant development for the industry, which is expected to accelerate insurance inclusion across the nation"
"This move is likely to attract substantial foreign capital while also fostering innovation and improving service quality through technological advancements. As a result, global insurance companies can now invest fully, and we anticipate the emergence of innovative products and services tailored to meet the diverse needs of Indian consumers,” he added.
Spokesperson of Insurance Brokers Association of India (IBAI) Sumit Bohra said "The announcement of enhancement in FDI limit in the insurance sector to 100% in the Union Budget 2025 is a positive move. This will now help to attract more foreign capital, enhance underwriting capacity, and foster innovation through global partnerships".
"The government’s acknowledgement of insurance as a critical pillar for financial security is encouraging," he said.
A forum for regulatory coordination and development of pension products will be set up, the Union Finance Minister stated. UNI JA SSP