Parliament on Wednesday passed a bill to increase foreign direct investment (FDI) in the insurance sector to 100 per cent from the existing 74 per cent, a move aimed at boosting insurance penetration, lowering premiums and generating employment. The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 was approved by the Rajya Sabha through a voice vote, a day after it was cleared by the Lok Sabha.
Replying to the debate, Finance Minister Nirmala Sitharaman said the higher FDI limit would enable foreign insurers to bring in more capital and expand operations in India, especially where joint venture partnerships are difficult to secure. She said increased competition would benefit consumers through lower premiums and better services.
Addressing concerns over employment, Sitharaman said job opportunities in the sector are expected to rise, noting that employment has nearly tripled since the FDI cap was earlier raised from 26 per cent to 74 per cent. She also rejected claims that the bill was rushed, stating that consultations were held over nearly two years.
The bill amends the Insurance Act, 1938, the LIC Act, 1956, and the IRDAI Act, 1999. It also allows the merger of non-insurance companies with insurance firms and provides for the creation of a Policyholders’ Education and Protection Fund to safeguard policyholder interests.