The Union Cabinet on December 12, 2025 approved an amendment to the Insurance Act to permit 100% Foreign Direct Investment (FDI) in India's insurance sector, removing the existing 74% FDI cap. The move is part of a broader liberalisation package alongside the SHANTI Bill that unlocks the nuclear energy sector to private and foreign participation. Under the revised FDI policy, a foreign entity may now own up to 100% of an Indian insurance company, subject to a crucial condition: at least one of the top leadership positions — Chairperson, Managing Director, or Chief Executive Officer — must be held by a resident Indian. This safeguard is designed to ensure domestic management oversight and accountability even under full foreign ownership. The insurance sector in India — comprising life, general, and health insurance — has historically been underpenetrated, with India's insurance density and penetration significantly below the global average. As of 2024-25, India had 57 registered insurance companies (24 life, 27 general, 6 standalone health insurers). The 74% cap, introduced progressively from 26% (2000) to 49% (2015) to 74% (2021), was seen as a deterrent to global insurance majors seeking full operational control. The 100% FDI move is expected to attract large global insurance groups (such as Allianz, AXA, Prudential, and Zurich) to set up fully owned subsidiaries in India, injecting capital, technology, and sophisticated risk management products into the Indian market. The Insurance Regulatory and Development Authority of India (IRDAI) will oversee compliance with the new ownership framework.