The Finance Ministry on Saturday announced 100% foreign direct investment (FDI) in the insurance sector through the automatic route.
Under the new Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026, full foreign ownership will be permitted in insurance firms and intermediaries, including brokers, via the automatic route. However, the limit for Life Insurance Corporation (LIC) remains capped at 20%.
Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025
In December 2025, Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, which allowed the foreign direct investment (FDI) cap in the insurance sector to be increased to 100% under the automatic route, up from the earlier limit of 74%. After receiving the President’s approval, the Bill was enacted into law.
Following this, in February 2026, the Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce and Industry Ministry officially notified 100% FDI in the insurance sector.
