Cabinet Approve 100% FDI In Insurance:
The Union Cabinet has approved a proposal to raise the FDI limit in insurance companies from 74% to 100%, to be implemented through the Insurance Laws (Amendment) Bill, 2025.Foreign Direct Investment (FDI) is when a non-resident investor acquires an equity stake (≥10%) in an Indian company, with a lasting interest and some degree of control/management influence.
Foreign investor brings capital into an Indian company through:
- Subscription to shares (MoA, preferential allotment, rights/bonus issue, private placement)
- Mergers, demergers, amalgamations
- Share purchase from existing residents
- Conversion of convertible instruments / notes, swap of instruments etc.
- FDI is regulated under FEMA, sectoral caps, pricing guidelines, entry routes and conditions laid down by the Government / RBI.
- In insurance, 100% FDI means a foreign insurer can now hold full ownership (subject to Indian regulatory conditions) in an Indian insurance company.
