India’s Finance Ministry has notified 100% foreign direct investment in the insurance sector under the automatic route, allowing foreign investors full ownership of private insurance companies and intermediaries.
The Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026, published in the Gazette of India on May 2, permit up to 100% foreign investment in the paid-up equity capital of Indian insurance companies, including portfolio investments. This applies to insurers, brokers, reinsurance brokers, corporate agents, third-party administrators, surveyors, and managing general agents.
Life Insurance Corporation of India remains capped at 20% foreign investment under the automatic route, subject to the Life Insurance Corporation Act, 1956. Companies receiving FDI must secure licensing from the Insurance Regulatory and Development Authority of India and ensure at least one resident Indian serves as chairperson, managing director, or CEO.
The change follows Parliament’s passage of the insurance law amendment bill in December 2025, presidential assent, and a February 2026 policy update by the Department for Promotion of Industry and Internal Trade. Investments must comply with Insurance Act provisions and RBI pricing guidelines.
This formalizes a long-awaited liberalization, easing prior 74% limits to draw global capital while maintaining regulatory oversight.
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