Parliament Clears Full Foreign Ownership in Insurance Sector

New Delhi, Dec 18, 2025 — India’s Parliament has approved a landmark reform allowing 100% foreign ownership in the insurance sector, ending the long-standing 74% cap and opening the door wider for global insurers. The move is aimed at accelerating capital inflows, improving penetration, and strengthening India’s rapidly expanding financial ecosystem.

The reform is expected to give foreign insurers greater operational control and long-term commitment, encouraging them to scale investments across life, general, and health insurance segments. Policymakers believe this will lead to better product innovation, improved risk management, and enhanced customer reach.

India’s insurance penetration remains below global averages despite strong economic growth and a large underinsured population. By liberalising ownership norms, the government aims to unlock fresh capital to support expansion into Tier-2, Tier-3, and rural markets.

The decision also aligns with India’s broader financial-sector reform agenda, positioning the country as a more attractive destination for global financial services firms. Analysts note that stronger foreign participation could improve competition while deepening the overall resilience of the insurance industry.

As demand for protection products rises, the approval of full foreign ownership marks a pivotal step toward building a more inclusive, well-capitalised, and globally integrated insurance market in India.