Finance Ministry notifies 100% FDI in insurance sector, amends FEMA Rules

The Finance Ministry on Saturday notified 100 per cent Foreign Direct Investment (FDI) in the insurance sector under the automatic route.

While 100 per cent foreign investment will be allowed in insurance companies and intermediaries, including brokers, under the automatic route, the cap is 20 per cent for Life Insurance Corporation (LIC), said the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026.

The Parliament had passed the Sabka Bima Sabki Raksha (amendment of insurance laws) Bill, 2025, in December, 2025, paving the way for hiking the FDI cap in the insurance sector to 100 per cent under the automatic route, from 74 per cent earlier. Subsequently, after the President’s assent, the Bill became law.

Thereafter in February, 2026, the Department for Promotion of Industry and Internal Trade (DPIIT) under the Commerce and Industry Ministry had notified 100 per cent FDI in the insurance sector.