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Finance Minister Nirmala Sitharaman has said that raising the FDI limit to 100 per cent in the insurance sector will help attract more capital, improve competition and increase insurance penetration by making policies more affordable.
According to media reports, Replying to the debate on the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, in the Lok Sabha, Finance Minister Nirmala Sitharaman said the proposed removal of the upper cap on FDI in the insurance sector would ensure capital flow in the sector.
This will ensure that the country benefits from better technology and world-class risk assessment models, as well as the best insurance products available anywhere in the world, she said, adding that FDI will attract more players and make insurance policies more affordable.
“Monopoly doesn’t give us that advantage, and therefore, the more the competition, the better the rates,” she added.
“Another priority which our government has given is to strengthen the public sector insurance companies…since 2014, we are doing a lot of things to improve the ecosystem…Capital to the tune of Rs 17,450 crore has been infused into three public sector general insurance companies to strengthen their capital base,” she said.
As a result of these and other measures taken, she said, LIC, GIC-Re and Agriculture Insurance Company of India Ltd (AICIL) reported their highest-ever profits last year, while other companies have also started turning profitable.
Lok Sabha passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025, with a voice vote.
The Bill would lead to amendments in the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the Insurance Regulatory and Development Authority Act, 1999
Reacting to the move, former Finance Minister and Senior Congress leader P Chidambaram took to X and wrote , I welcome the decision of the government to allow 100 per cent FDI in the insurance sector I recall the day under the I K Gujral government when the BJP opposed a Bill in Parliament that allowed 20 per cent FDI in the insurance sector It is a long distance that we have traveled since 1997-98
I welcome the decision of the government to allow 100 per cent FDI in the insurance sector
I recall the day under the I K Gujral government when the BJP opposed a Bill in Parliament that allowed 20 per cent FDI in the insurance sector
It is a long distance that we have traveled…
— P. Chidambaram (@PChidambaram_IN) December 13, 2025
