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FM Proposes 100% FDI in Insurance Sector to Attract Global Players

FM Proposes 100% FDI in Insurance Sector to Attract Global Players
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01 Feb (GulistanNewsTv): In a significant move to bolster the Indian insurance industry, Finance Minister Nirmala Sitharaman announced in the Union Budget 2025-26 that the Foreign Direct Investment (FDI) cap in the insurance sector will be increased from 74% to 100%. This policy change aims to attract substantial foreign capital, enhance competition, and improve insurance accessibility across the country.
Key Highlights:
• Objective: The primary goal is to achieve “Insurance for All” by 2047, thereby broadening the reach and affordability of insurance products for Indian citizens.
• Expected Benefits:
o Increased Capital Inflows: Allowing 100% FDI is anticipated to bring significant foreign investments into the insurance sector, bolstering its financial strength.
o Enhanced Competition: The entry of global insurance giants is expected to foster a more competitive market, leading to improved services and innovative products for consumers.
Improved Accessibility: With increased foreign participation, insurance products may become more accessible and affordable to a larger segment of the population.
Regulatory Considerations:
The proposal is part of the upcoming Insurance Amendment Bill, which is set to be tabled during the winter session of Parliament. This bill also aims to allow agents to sell policies from multiple companies, enhancing market efficiency and consumer choice.
Industry Reactions:
Industry experts and analysts view this move as a significant step toward modernizing the insurance sector. They believe that allowing 100% FDI will not only open the floodgates for offshore capital but also facilitate the entry of new foreign insurers, helping the country enhance insurance penetration.
While the proposal is still under discussion, it reflects the government’s commitment to reforming the insurance industry and aligning it with global standards. GulistanNewsTv

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