In a landmark move to transform the insurance landscape, the Rajya Sabha has given its final approval to a crucial amendment bill, paving the way for complete foreign ownership in the sector. The upper house passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025 on Wednesday, December 17, following its passage in the Lok Sabha a day earlier.
Historic Vote Unlocks Full Foreign Investment
The bill was cleared through a voice vote in the Rajya Sabha, marking the culmination of the parliamentary process. This legislative action amends existing laws to raise the Foreign Direct Investment (FDI) cap in the insurance sector by 100 per cent. Previously, the limit for foreign investment was set at 74 per cent. The increase to 100% FDI is one of the most significant reforms in the financial sector in recent years.
Expected Impact on Insurance and Economy
The government and industry experts anticipate multiple positive outcomes from this bold reform. The primary goals are to deepen insurance coverage across the country and make it more accessible and affordable for the common citizen.
The key expected benefits include:
- Increased Insurance Penetration: By attracting global capital and expertise, the sector is expected to expand its reach, especially in rural and underserved areas.
- Lower Premiums: Enhanced competition and inflow of capital could lead to more competitive pricing for policyholders.
- Boost in Job Creation: The growth and expansion of insurance companies are likely to generate significant employment opportunities in sales, management, and support services.
Path Forward for the Insurance Sector
With the bill receiving approval from both houses of Parliament, it now awaits the President's assent to become law. Once enacted, it will empower the government to notify the new 100% FDI limit. This reform is seen as a major step towards fulfilling the broader vision of financial inclusion and strengthening the insurance ecosystem in India. The move is also expected to make the domestic insurance industry more robust and globally competitive, attracting long-term strategic investments.
This remains a developing story, and further details regarding the implementation and specific regulations are awaited.
