LIC

Timeline

1. 2 May2026
   Economy

   FDI cap in insurance raised to 100 percent under automatic route¹²³

   The Finance Ministry notified FEMA rules on 2 May removing the 74 percent cap and permitting up to 100 percent foreign investment in insurers through the automatic route; LIC stays capped at 20 percent.

   • Foreign investment in insurance raised to 100 percent under the automatic route; notified 2 May 2026 via the FEMA Non-debt Instruments (Second Amendment) Rules 2026
   • Earlier cap was 74 percent
   • LIC stays under a separate framework with foreign investment capped at 20 percent
   • Foreign-owned insurers must still comply with the Insurance Act 1938 and need IRDAI approval
2. 21 Dec2025
   Legislation

   Insurance Laws Amendment Act allows 100 percent FDI in insurers⁴⁵⁶

   The Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act was notified in late December 2025. Its headline change lets foreign investors hold up to 100 percent of Indian insurance companies, alongside KYC rules and stronger powers for the regulator.

   • Amends the Insurance Act 1938, LIC Act 1956 and IRDA Act 1999
   • Foreign investment cap in insurance raised from 74 to 100 percent
   • Act received Presidential assent about 20 December 2025 and was gazetted 21 December
   • Most provisions brought into force from 5 February 2026
   • At least one of chairperson, MD or CEO of an insurer with foreign investment must be a resident Indian citizen

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Sources

1. IANS
2. SCC Online
3. Deccan Chronicle
4. Taxmann
5. Clyde & Co
6. Outlook Business