DPIIT notifies 100% FDI in insurance companies under automatic route

The Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce and Industry Ministry has notified 100 per cent foreign direct investment (FDI) in the insurance sector following the enactment of legislation in this regard.

The Government of India has reviewed the extant FDO policy on insurance sector and has made the amendments under the Consolidated FDI Policy of 2020, as amended from time to time, the DPIIT said in a notification.

As per the Press Note No. 1 (2026 Series), 100 per cent FDI is allowed in the insurance companies under automatic route.

In case of Life Insurance Corporation of India, only 20 per cent is permitted through automatic route.

In an Indian insurance company having foreign investment, at least one among the chairperson of its board, its managing director and its chief executive officer, shall be resident Indian citizens, it said while specifying other conditions.

Parliament passed Sabka Bima Sabki Raksha (amendment of insurance laws) Bill, 2025, in December. Subsequently, after the President's assent, the Bill became law.

The government notified February 5, 2026, as the date for enforcement of most provisions of the Sabka Bima Sabki Raksha (amendment of insurance laws) Act, 2025.

The regulations include governance, capital participation (including 100 per cent FDI), policyholder protection measures and institutional oversight, which will become operational immediately, while Section 25 has been kept out of the first phase of implementation.