Raising FDI in insurance aims to unlock sector's full potential: FM

Raising the FDI limit in insurance to 100 per cent will help the sector achieve its full potential by growing at 7.1 per cent per annum over the next 5 years, outpacing the global growth, Finance Minister Nirmala Sitharaman informed Parliament on Monday.

The finance minister in Union Budget 2025-26 had proposed to raise the limit of foreign investment in insurance sector from the existing 74 per cent to 100 per cent.

Raising the limit will eliminate the need for foreign investors to find Indian partners for the remaining 26 per cent, easing the process of setting up their operations in India, effectively increasing the number of insurers in the country, she said in a written reply to Lok Sabha.

This will attract stable and sustained foreign investment, increase competition, facilitate technology transfer, and improve insurance penetration in the country, she said.

The decision to increase FDI component in a particular insurance company is made by its promoters, depending upon various factors such as capital requirement of the company, solvency requirement, future business plans etc, the minister said.

Replying to another question, Sitharaman said in order to increase coverage under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Atal Pension Yojana (APY), regular campaigns were held at grass root level with active participation of banks and local administration.

Further, she said, a 3-month 'Financial Inclusion Saturation Campaign' has been launched across the country in 2.70 lakh gram panchayats and Urban Local Bodies (ULBs) from July 1, 2025, with the aim of increasing enrolments in PMJJBY, PMSBY and APY.

To achieve saturation in these Jansuraksha schemes, camps are being organized at gram panchayat level and ULBs by banks, providing residents with direct access to information and assistance for enrolling in the scheme, she said.

The initiative is aimed to raise awareness and improve participation, helping to bridge gaps in enrolment under the scheme.

The Centre for Financial Literacy (CFL) project was initiated by the Reserve Bank of India in 2017 with an objective to adopt community-led innovative and participatory approaches to financial literacy, the minister said.

As on March 31, 2025, a total of 2,421 CFLs have been set up across the country with one CFL covering three blocks on an average, she added.