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May 04, 2026
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Govt opens insurance sector to 100% FDI; LIC cap stays at 20%
The government on Saturday notified 100% FDI in insurance companies under the automatic route, an official notification read. This step will open the sector to greater foreign participation while retaining key regulatory safeguards. According to the notification, foreign investment will be subject to compliance with the Insurance Act, 1938 and companies must secure licences or approvals from the Insurance Regulatory and Development Authority of India to undertake insurance and related activities.
However, Life Insurance Corporation of India will continue under a separate framework. Foreign investment in LIC remains capped at 20% under the automatic route. “Foreign investment in LIC shall be subject to compliance with the provisions of the Life Insurance Corporation Act, 1956 (31 of 1956), and such other provisions of the Insurance Act, 1938 (4 of 1938), as are applicable to LIC as per the provisions of section 43 of the Life Insurance Corporation Act, 1956 (31 of 1956),” the notification read.
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