The government on Saturday notified 100% Foreign Direct Investment (FDI) in insurance companies under the automatic route, allowing greater participation from foreign investors.
"Foreign investment in this sector shall be subject to compliance with the provisions of the Insurance Act, 1938(4 of 1938), and the condition that Companies receiving FDI shall obtain necessary licence or approval from the Insurance Regulatory and Development Authority of India for undertaking insurance and related activities," reads the notification.
However, Life Insurance Corporation of India (LIC) will remain under a separate framework, with foreign investment capped at 20% under the automatic route.
"Foreign investment in LIC shall be subject to compliance with the provisions of the Life Insurance Corporation Act, 1956 (31 of 1956), and such other provisions of the Insurance Act, 1938 (4 of 1938), as are applicable to LIC as per the provisions of section 43 of the Life Insurance Corporation Act, 1956 (31 of 1956)."
The rules also mandate that in any Indian insurance company with foreign investment, at least one of the chairperson of the board, managing director, or chief executive officer must be an Indian resident citizen.
100% foreign investment under the automatic route has also bee notified for insurance Intermediaries including insurance brokers, reinsurance brokers, insurance consultants, corporate agents, third party administrator, Surveyors and Loss Assessors, managing general agents, insurance repositories and such other entities, as may be notified by the Insurance Regulatory and Development Authority of India from time to time.
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Earlier, in February, the Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce and Industry Ministry had already notified 100% FDI in the insurance sector.
In December 2025, Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, which brought key changes to the insurance framework.
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The legislation amended three major laws governing the sector — the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999.
The bill amends three Acts related to Insurance sector, namely, The Insurance Act,1938, The Life Insurance Corporation Act, 1956 and The Insurance Regulatory and Development Authority Act, 1999.
In March the government eased norms for foreign direct investment from all countries that share land borders with India. After the new changes, in the investments from land-bordering countries up to 10% non-controlling stake will come under the
automatic route without prior approval.
The cabinet has made amends in the Press Note 3 framework governing FDI from land-bordering countries.
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