FDI for growth: Foreign participation in insurance should raise competition

Even as the sector opens up to greater competition and foreign investment, long-standing challenges continue to constrain its reach and credibility

Parliament this week cleared the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, raising the foreign direct investment (FDI) limit in insurance companies from 74 per cent to 100 per cent, enabling complete foreign ownership. This marks the culmination of liberalisation, which began in 2000, when the sector was opened up to private players with a 26 per cent FDI cap. The limit was raised to 49 per cent in 2014 and further to 74 per cent in 2021. As of March 2024, 41 insurance companies had FDI and, as of September 2024, the industry had