The Indian government is considering a proposal to raise the foreign direct investment (FDI) limit in the insurance sector from 74% to 100%. Supported by the Insurance Regulatory and Development Authority of India (Irdai), this move aims to attract more foreign investment and ease current restrictions, including the requirement for top management positions to be held by Indians.
Officials are working on amendments to the Insurance Act, though the timing of the bill’s introduction is uncertain. The Department for Promotion of Industry and Internal Trade is also reviewing related regulations to encourage foreign investment.
Increasing the FDI limit could benefit the capital-intensive life insurance sector, which requires substantial investment to meet regulatory solvency requirements. Despite past increases in the FDI cap, the sector remains dominated by strong Indian players, and foreign investments are closely regulated.
Political approval is necessary, given the BJP’s current position in the Lok Sabha, but support from NDA partners is expected. This initiative aligns with broader efforts to liberalize consumer-facing sectors and attract significant foreign capital.
