The Ministry of Finance (Department of Financial Services) has notified the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025 (“Rules”) dated December 30, 2025 bearing Gazette ID CG-DL-E-30122025-268929 in the Gazette of India. The Gazette notification has been issued pursuant to the draft Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025 dated August 29, 2025, which invited suggestions and objections from stakeholders. The Rules amend the Indian Insurance Companies (Foreign Investment) Rules, 2015. A summary of the key amendments is provided below.
| Sl. No. | Rule | Existing Provision | Amendment | Revised Provision |
|---|---|---|---|---|
| 1 | Short Title & Commencement | — | New Rules notified. | These Rules shall be called the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025 and shall come into force from the date of publication in the Official Gazette. |
| 2 | Rule 2(1)(f) – Foreign Direct Investment | Definition referred to FEMA Regulations, 2000. | References updated to FEMA (Non-Debt Instruments) Rules, 2019. | FDI shall mean investment by eligible non-resident entities under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. Investment by FVCIs shall also be governed under the said Rules. |
| 3 | Rule 2(1)(g) – Foreign Investors | Referred to FEMA Regulations, 2000. | Updated reference to FEMA (Non-Debt Instruments) Rules, 2019. | Foreign Investors shall include eligible non-residents investing through FDI or FPI under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. |
| 4 | Rule 2(1)(h) – Foreign Portfolio Investment | Governed by Regulation 5 of FEMA Regulations, 2000. | Updated to FEMA (Non-Debt Instruments) Rules, 2019. | FPI shall be governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. |
| 5 | Rule 2(1)(n) | Defined “Public Financial Institution”. | Clause omitted. | Definition removed. |
| 6 | Rule 3 – Quantum of Foreign Direct Investment | Foreign investment capped at 74% of paid-up equity capital. |
| Foreign Direct Investment shall not exceed the percentage prescribed under the Insurance Act, 1938. |
| 7 | Rule 4 – Resident Indian Citizens | Majority of Directors, KMPs and one among Chairperson, MD or CEO had to be Resident Indian Citizens. | Rule substituted. | At least one among the Chairperson, Managing Director or CEO shall be a Resident Indian Citizen. |
| 8 | Rule 4A | Additional governance requirements for companies with foreign investment exceeding 49%. | Entire Rule omitted. | Rule deleted. |
| 9 | Rule 5 – Automatic Route | Foreign investment proposals up to 74% allowed under automatic route. | Replaced fixed limit with limit under Insurance Act, 1938. | Automatic route available up to the percentage permitted under the Insurance Act, 1938, subject to IRDAI verification. |
| 10 | Rule 7 – Foreign Portfolio Investment | Governed by FEMA Regulations, 2000 and SEBI FPI Regulations. | FEMA reference updated. | Governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and SEBI (Foreign Portfolio Investors) Regulations. |
| 11 | Rule 9(3)(iii), (v) & (vii) | Insurance intermediaries with majority foreign shareholding had to comply with dividend repatriation approval, payment restrictions and Board/KMP composition requirements. | Relevant clauses omitted. | Clauses relating to dividend repatriation approval, payment restrictions and Board/KMP composition have been removed. |
Attachment
Source Category: Others
Comments are closed