FDI cap for Indian insurers rise to 100%: Finance minister

The increased limit will apply only to companies that invest the entire premium within India.

The Indian government will raise the foreign direct investment (FDI) cap in the insurance sector from 74% to 100%, Finance Minister Nirmala Sitharaman announced in her Budget 2025 to 2026 speech, as reported by The Hindu.

However, the increased limit will apply only to companies that invest the entire premium within India. Existing restrictions and conditions on foreign investment will be reviewed and simplified.

The move aligns with the government’s “Insurance for All by 2047” goal and follows a public consultation initiated by the Department of Financial Services in November 2024 on raising FDI limits and allowing insurers to engage in multiple classes of insurance and related activities.

Meanwhile, the Goods and Services Tax (GST) Council has yet to make a decision on reducing the 18% GST on insurance, particularly health coverage, as discussions continue.

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