Finance Minister Nirmala Sitharaman speaks in the Lok Sabha during the Winter session of Parliament, in New Delhi.
Credit: Sansad TV via PTI Photo
New Delhi: The Rajya Sabha on Wednesday passed the insurance amendment bill that seeks to raise foreign direct investment (FDI) limit in the insurance sector to 100% from the current 74%.
The bill was passed in the Lok Sabha, the lower house of Parliament, on Tuesday. Officially named ‘the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025’, the bill is now pending for President’s assent.
The bill was passed in the Rajya Sabha with a voice vote despite opposition members' demand for referring it to a Parliamentary committee for further scrutiny.
The bill will lead to amendments in three key laws regulating the insurance sector in the country - the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the Insurance Regulatory and Development Authority Act, 1999.
The biggest change will be in the form of allowing higher FDI. Following the implementation of the new regulations, foreign firms won’t require a local partner to do insurance business in the country.
Replying to a debate in the upper house of parliament, Finance Minister Nirmala Sitharaman said increasing the FDI limit to 100% will pave the way for more foreign companies to enter India, as in many cases, they do not find joint venture partners due to various reasons.
She expressed hope that the new legislation would help attract more capital in the insurance sector.
“By encouraging greater participation, innovation, and capital inflows, the amendment is expected to promote genuine competition and growth while creating a level playing field,” said Peuli Das, Partner-Actuarial Services, BDO India.