India Opens Insurance Sector to 100% FDI via Automatic Route

The government has formally opened the insurance sector to full foreign ownership, issuing a notification to operationalise the revised FDI framework, as per PTI report. 

100% FDI Notified Under Consolidated Policy 

The Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry has notified 100% foreign direct investment in insurance companies through the automatic route. 

The revision has been incorporated under the Consolidated FDI Policy of 2020, as amended from time to time. The notification follows Press Note No. 1 (2026 Series), which confirms the updated investment ceiling. 

Legislative Backing and Enforcement Timeline 

The change comes after Parliament passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 in December. Following Presidential assent, it became the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. 

The government notified February 5, 2026, as the enforcement date for most provisions of the Act. Section 25 has been excluded from the first phase of implementation. 

Governance and Structural Conditions 

Under the revised framework, in an Indian insurance company with foreign investment, at least 1 among the chairperson, managing director or chief executive officer must be a resident Indian citizen. 

The operational provisions cover governance norms, capital participation including 100% FDI, policyholder protection measures, and institutional oversight. 

Read More: Bandhan Life Insurance Launches iInvest Ultima ULIP with New Mid Cap NFL! 

Conclusion 

With the notification in place, India’s insurance sector now permits 100% foreign ownership under the automatic route, supported by the amended insurance legislation effective February 5, 2026. 

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