Overview
- India’s Finance Ministry, which notified the FEMA Non‑debt Instruments Second Amendment Rules on Saturday, made full foreign ownership of insurers and insurance intermediaries possible under the automatic route and put the 2025 insurance law into force.
- Even with the automatic route, investors must get licensing and verification from the Insurance Regulatory and Development Authority of India and follow the Insurance Act.
- Companies that receive foreign investment must have at least one resident Indian citizen as chairperson, managing director or CEO, and any share purchase must follow Reserve Bank pricing rules under FEMA.
- The state-run Life Insurance Corporation remains under a separate framework with foreign inflows capped at 20% through the automatic route under the LIC Act and applicable insurance provisions.
- In a parallel step, new rules now let overseas firms with up to 10% Chinese or Hong Kong shareholding invest automatically in eligible sectors, though entities registered in those places and other land-border nations remain excluded.