The Government of India is preparing to introduce a landmark Bill to raise foreign direct investment (FDI) in the insurance sector to 100% during the upcoming winter session of Parliament, according to reports. The winter session, scheduled from December 1 to December 19, 2025, will span 15 working days and include the tabling of 10 key legislations.
Among these is the Insurance Laws (Amendment) Bill 2025, which seeks to deepen insurance penetration, accelerate the growth and development of the sector, and significantly improve the ease of doing business. The Lok Sabha bulletin confirmed the Bill’s inclusion in the legislative agenda for the session.
The move follows Finance Minister Nirmala Sitharaman’s announcement during this year’s Union Budget, where she proposed raising the foreign investment limit in the insurance sector from the existing 74% to 100%. The proposal is positioned as part of the Centre’s next-generation financial sector reforms intended to support long-term economic expansion.
So far, the Indian insurance sector has already attracted ₹82,000 crore in foreign direct investment. The Ministry of Finance has recommended amending several provisions of the Insurance Act, 1938, including raising the FDI ceiling to 100%, reducing paid-up capital requirements for insurers, and introducing a composite licence that would allow companies to operate multiple insurance lines under a single framework.
Additionally, amendments proposed to the LIC Act aim to empower the Life Insurance Corporation of India’s board to take key operational decisions — such as opening new branches, hiring talent, and other strategic moves — without requiring extensive government approval.
According to the ministry, the overarching goal of the amendments is to strengthen policyholder protection, enhance financial security, and encourage more players to enter the insurance market. This, in turn, is expected to stimulate economic activity, create jobs, and support the government’s long-term vision of achieving “Insurance for All by 2047.”
The Insurance Act of 1938 remains the primary legislation governing the insurance industry in India, laying down the operational framework and defining the relationship between insurers, policyholders, shareholders, and the Insurance Regulatory and Development Authority of India (Irdai).
Securities Markets Code Bill Also on Agenda
The Finance Ministry will also introduce the Securities Markets Code (SMC) Bill, 2025, which aims to consolidate three major financial legislations —
- the Securities and Exchange Board of India (SEBI) Act, 1992,
- the Depositories Act, 1996, and
- the Securities Contracts (Regulation) Act, 1956 —
into a single, rationalised Securities Markets Code. The objective is to create a more streamlined and efficient regulatory architecture for India’s capital markets.
Supplementary Demands for Grants to Be Presented
Another key financial item listed in the bulletin is the presentation of the first batch of Supplementary Demands for Grants for 2025–26. Through these demands, the government seeks Parliamentary approval for additional expenditure beyond what was allocated in the Union Budget.
A second and final batch of Supplementary Demands for Grants will be presented during the Budget session, likely to commence toward the end of January 2026.