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.
-
Indian Markets Turning Corner After Two Tough Years, Says Sandeep Tandon -
NDTV Profit Ignite 2026: Experts See Opportunity In Equities, Stay Bullish For Long-Term -
Buy Right, Sit Tight Does Not Work for Individual Stocks, Says Dinshaw Irani -
'Worst Is Behind': Quant MF Sees Market Bottom, Flags 'Extreme Euphoria' In Midcaps -
India's Mutual Fund Industry Could Become A $1 Trillion Opportunity, Say Fund Managers -
'Foreign Investors Are Baraatis': Raamdeo Agrawal's Take On LTCG Tax -
Stay Invested Through Market Cycles: Raamdeo Agrawal at NDTV Profit Ignite -
Ramesh Damani Remains Bullish On India For Next 20-30 Years, Sees Bargains Amid Market Weakness -
CAS Came After A Long Consultation Process: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFIT IGNITE -
Aim To Cut FPI Onboarding Time From Mth To Five Days: SEBI Chairman Tuhin Kanta Pandey AT NDTV PROFI
"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.
ALSO READ: Net FDI Hits 45-Month High Of $4.6 Billion in February, Ending 6-Month Slump
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.
ALSO READ: India Permits Automatic FDI Approval Up to 10% From China and Border Nations
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.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.