100% FDI in insurance unwarranted

Foreign investors have consistently advocated for ease of doing business in the capital-intensive insurance sector, highlighting the challenges of securing reliable domestic partners.

- Santosh Kumar Mohapatra

The Union Budget 2025 proposed increasing the FDI limit in the insurance sector to 100% from 74% through automatic route, indicating a continued thrust to attract foreign investment. India began allowing FDI in insurance in 2000 with a 26% cap, which was increased to 49% in 2015 and 74% in 2021. It is argued that with complete foreign ownership, global investors may increase capital deployment in the Indian insurance sector without the requirement of having a domestic partner.