India has notified 100% foreign direct investment in insurance companies via the automatic route, coming into effect under the Insurance Laws (Amendment) Act, 2025. The move follows Cabinet clearance and raises the FDI cap from 74% to 100%, aiming to boost long-term capital and insurance penetration. Foreign investment still needs IRDAI regulatory clearance, with conditions including resident leadership, RBI FEMA pricing norms, and LIC remains capped at 20%.
The Centre has allowed 100% FDI in the insurance sector through the automatic route, a major shift from tighter entry conditions. The move keeps FDI subject to the Insurance Act, 1938, and requires companies receiving foreign investment to obtain the necessary licence or approval from IRDAI to undertake insurance and related activities.
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