Executive Summary:
This document presents the Finance Minister's response to questions raised in Lok Sabha regarding Foreign Direct Investment (FDI) in the Indian insurance sector. It addresses the details of FDI in private life and general insurance companies, reasons for not fully utilizing the increased FDI cap, and the rationale for potentially raising the cap to 100%. It includes annexures with company-wise details of equity share capital as of December 31, 2024.
Key Points / Main Content:
FDI Details and Limits:
* Section 27A b of the Insurance Act, 1938, governs the upper limit of FDI in insurance companies.
* The decision to increase FDI is at the discretion of the company's promoters, based on factors like capital needs and business plans.
Government Objectives:
* Increasing the FDI limit aims to unlock the Indian insurance sector's potential, projecting 7.1% annual growth over the next five years.
* The provision is enabling, allowing interested insurers to explore increasing their FDI percentage.
* Eliminating the need for foreign investors to find Indian partners for the remaining 26% easing the process of setting up their operations in India and increasing the number of insurers in the country.
* Removing the FDI cap is intended to attract stable foreign investment, increase competition, facilitate technology transfer, and improve insurance penetration.
Equity Share Capital Data (as of 31.12.2024):
* Annexure A provides company-wise details of total and foreign equity share capital for life insurers.
* Annexure A provides company-wise details of total and foreign equity share capital for private general and health insurers.
Impact Analysis:
Insurance Companies:
* Impact: Companies have the option to increase FDI based on their specific needs and strategic goals.
* Action Required: Evaluate capital requirements, solvency needs, and business plans to determine if increasing FDI is beneficial.
Foreign Investors:
* Impact: The potential increase to 100% FDI simplifies the process of establishing operations in India and removes the need for local partners.
* Action Required: Assess the Indian insurance market and consider establishing or expanding operations without the constraint of needing an Indian partner.
Indian Insurance Sector:
* Impact: Increased competition, technology transfer, and potential for greater insurance penetration.
* Action Required: Adapt to a potentially more competitive environment and explore opportunities for technological advancements.
Key Entities Referenced
Foreign Direct Investment: Investment from a foreign entity into an Indian insurance company, subject to limits defined by the Insurance Act, 1938.
Insurance Act, 1938: Indian legislation that prescribes the upper limit of Foreign Direct Investment (FDI) in an insurance company under Section 27A b.
Life and General Insurance sector: The segment of the Indian financial market encompassing companies providing life and general insurance products.
Nirmala Sitharaman: The Finance Minister answering the Lok Sabha Starred Question No. 112 regarding FDI in the Insurance Sector.
Lok Sabha: The lower house of the Parliament of India, where the starred question regarding FDI in the insurance sector was raised.
IRDAI: Insurance Regulatory and Development Authority of India, which is the source for the equity share capital data of insurance companies as of 31.12.2024.
Aditya Birla Sun Life Insurance Co. Ltd.: One of the listed private insurance companies with Foreign Direct Investment.
Indian insurance sector: The overall insurance market in India, projected to grow at 7.1% annually.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
STARRED QUESTION No. *112
ANSWERED ON MONDAY, 28 JULY, 2025/SRAVANA 6, 1947 (SAKA)
FDI in Insurance Sector
*112. Shri Sachithanantham R:
Will the Minister of Finance be pleased to state:
a) The details of the FDI part of the Capital employed in Life and General Insurance sector
by the Private Insurance companies in total as well as company-wise;
b) the reason for not opting the hike in FDI by many Private Insurance companies though
cap was raised to 74 per cent; and
c) the need and reasons for hike in cap on FDI to 100 per cent when earlier cap itself was
not fully utilised by the companies?
ANSWER
THE FINANCE MINISTER
(SMT. NIRMALA SITHARAMAN)
(a) to (c): A Statement is laid on the Table of the House.
***********STATEMENT REFERRED TO IN REPLY TO PART (a) to (c) OF LOK SABHA STARRED
QUESTION NO. *112 FOR 28th JULY, 2025 REGARDING “FDI IN INSURANCE SECTOR”
TABLED BY SHRI SACHITHANANTHAM R, HON’BLE MEMBER OF PARLIAMENT
(a) to (c): The details of the Foreign Direct Investment part of the capital employed in Life and
General Insurance sector by the Private Insurance companies in total as well as company-wise
is attached herewith as Annexure A.
Section 2(7A) (b) of Insurance Act, 1938, prescribes the upper limit of FDI in an insurance
company. The decision to increase FDI component in a particular insurance company is made
by its promoters, depending upon various factors such as capital requirement of the company,
solvency requirement, future business plans etc.
With the increase in FDI limit from 74% to 100% for insurance companies, the Government aims
to unlock the full potential of the Indian insurance sector, which is projected to grow at 7.1%
annually over the next five years, outpacing global and emerging market growth. This is an
enabling provision which will help the interested insurers to explore hiking the FDI percentage.
Further, this will eliminate the need for foreign investors to find Indian partners for the remaining
26%, easing the process of setting up their operations in India, effectively increasing the number
of insurers in the country. Removing the FDI cap will attract stable and sustained foreign
investment, increase competition, facilitate technology transfer, and improve insurance
penetration in the country.
*****Annexure A referred in reply to parts (a) of Lok Sabha Starred Question No. 112 for 28.07.2025
Equity Share Capital of Life Insurers as on 31.12.2024
S. Insurer Total Foreign %
No. (Rs. In crore) (Rs. In crore) Foreign
1 Aditya Birla Sun Life Insurance Co. Ltd. 2,019.59 989.60 49.00%
74.00%
Ageas Federal Life Insurance Co. Ltd. 800.00 592.00
2
74.00%
Aviva Life Insurance Co. Ltd. 2,189.90 1,620.53
3
26.00%
Bajaj Allianz Life Insurance Co. Ltd. 150.71 39.18
4
26.00%
Canara HSBC Life Insurance Co. Ltd. 950.00 247.00
5
6 C redit Access Life Insurance Ltd. 168.00 124.32 74.00%
7 E delweiss Tokio Life Insurance Co. Ltd. 1,065.13 228.12 21.42%
8 Future Generali Life Insurance Co. Ltd. 2,599.32 1,923.46 74.00%
9 Go Digit Life Insurance Ltd. 177.71 77.04 43.35%
25.30%
HDFC Life Insurance Co. Ltd. 2,152.80 544.59
10
36.91%
ICICI Prudential Life Insurance Co. Ltd. 1,445.21 533.47
11
26.00%
IndiaFirst Life Insurance Co. Ltd. 754.52 196.14
12
48.92%
PNB MetLife Insurance Co. Ltd. 2,012.88 984.61
13
49.00%
Pramerica Life Insurance Co. Ltd. 374.06 183.29
14
49.00%
Reliance Nippon Life Insurance Co. Ltd. 1,196.32 586.20
15
24.12%
SBI Life Insurance Co. Ltd. 1,002.09 241.71
16
23.00%
Shriram Life Insurance Co. Ltd. 179.37 41.26
17
45.94%
Star Union Dai-ichi Life Insurance Co. Ltd. 338.96 155.72
18
49.00%
Tata AIA Life Insurance Co. Ltd. 4,533.50 2,221.42
19
Total 24,110.07 11,529.66 47.82%
Source: IRDAIEQUITY SHARE CAPITAL OF PRIVATE GENERAL AND HEALTH INSURERS AS ON 31.12.2024
Total Foreign %
Sr. No. Insurers
(Rs. In crore) (Rs. In crore) Foreign
Private Sector General Insurers
1 Bajaj Allianz General Insurance Co. Ltd. 110.23 28.66 26.00%
2 Cholamandalam MS General Insurance Co. Ltd. 298.81 119.52 40.00%
Future Generali India Insurance Company
3 1,206.40 609.30 50.51%
Limited
4 Go Digit General Insurance Limited 922.24 86.24 9.35%
5 HDFC ERGO General Insurance Co. Ltd. 723.68 355.24 49.09%
6 ICICI Lombard General Insurance Co. Ltd. 495.23 121.79 24.59%
7 IFFCO Tokio General Insurance Co. Ltd. 287.82 141.03 49.00%
Kotak Mahindra General Insurance Company
8 1,072.73 750.91 70.00%
Limited
9 Liberty General Insurance Limited 1,131.54 550.88 48.68%
Raheja QBE General Insurance Company
10 455.05 222.97 49.00%
Limited
11 Royal Sundaram General Insurance Co. Limited 449.00 179.60 40.00%
12 SBI General Insurance Company Limited 223.72 60.54 27.06%
13 Shriram General Insurance Company Limited 259.16 59.40 22.92%
14 Tata AIG General Insurance Co. Ltd. 995.15 258.56 25.98%
15 Universal Sompo General Insurance Co. Ltd. 368.18 127.44 34.61%
Total 8998.94 3672.08 40.80%
STANDALONE HEALTH INSURERS
16 Aditya Birla Health insurance Co. Limited 538.00 237.19 44.09%
ManipalCigna Health Insurance Company
17 1,645.25 805.49 48.96%
Limited
18 Niva Bupa Health Insurance Company Ltd. 1,827.03 207.08 11.33%
Star Health and Allied Insurance Company
20 587.68 104.82 17.84%
Limited
Total 4597.96 1354.58 29.46%
Source: IRDAI