India allows 100% FDI in insurance sector under automatic route

New Delhi: India on Wednesday operationalised up to 100% foreign ownership in the insurance sector, a move aimed at deepening insurance penetration and attracting overseas investment.

The Department for Promotion of Industry and Internal Trade issued in Press Note 1 (2026 Series) stating that foreign investment including by portfolio investors in domestic insurance companies will be permitted under the automatic route, subject to regulatory clearance and verification by the Insurance Regulatory and Development Authority of India (IRDAI).

The policy amendment aligns the foreign investment framework with the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025. The finance ministry earlier notified that the provisions of the law, except Section 25, will take effect from February 5.


Insurance companies with FDI must have at least one resident Indian citizen serving as chairperson, managing director or chief executive officer.

Any increase in foreign shareholding must comply with pricing guidelines prescribed by the Reserve Bank of India under the Foreign Exchange Management Act (Fema) regulations.

The 100% limit will also apply to insurance intermediaries including brokers, reinsurance brokers, corporate agents, third-party administrators, surveyors and loss assessors, managing general agents and insurance repositories, subject to IRDAI norms.

India had previously allowed full foreign ownership in insurance intermediaries in 2020 and permitted 20% FDI in state-run Life Insurance Corp. in 2022.

Entities such as banks operating as insurance intermediaries will continue to be governed by foreign investment limits applicable to their primary sector, provided non-insurance revenue exceeds 50% of total revenue in a financial year. Majority foreign-owned intermediaries must be incorporated as limited companies under the Companies Act, 2013.