The Ministry of Finance has notified the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025, bringing them into force from 30 December 2025 after considering public feedback on the draft. The amendments align the 2015 Rules with the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and rationalise foreign investment terminology by replacing “Total Foreign Investment” with “Foreign Direct Investment” (FDI), expressly including eligible FVCI investments. The rigid 74% foreign investment cap in the Rules is removed and made dynamic by linking the permissible FDI limit to the ceiling stipulated under the Insurance Act, 1938. Governance requirements are simplified by mandating that at least one among the CEO, Managing Director, or Chairperson be a resident Indian citizen, while certain restrictive provisions and clauses are omitted. Overall, the amendments modernise definitions, harmonise FEMA references, and provide regulatory flexibility while retaining key Indian management safeguards.
MINISTRY OF FINANCE
(Department of Financial Services)
New Delhi
NOTIFICATION
Dated: 30th December, 2025.
G.S.R. 928(E).—Whereas the draft of the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.591(E), dated the 29th August, 2025, inviting suggestions or objections from all persons likely to be affected thereby; and notice was given that the said draft rules would be taken into consideration after the expiry of a period of fifteen days from the date on which the copies of the Gazette notification are made available to the public;
And whereas, the copies of the said Gazette notification were made available to the public on the 29th August, 2025;
And whereas, the suggestions or objections received in response to the above mentioned draft rules have been duly considered by the Central Government;
Now, therefore, in exercise of the powers conferred by clause (aaa) of sub-section (2) of section 114 read with sub-clause (b) of clause (7A) of section 2 of the Insurance Act, 1938 (4 of 1938), the Central Government hereby makes the following rules further to amend the Indian Insurance Companies (Foreign Investment) Rules, 2015, namely: —
I. Short title and commencement. — (1) These rules may be called the Indian Insurance Companies (Foreign Investment) Amendment Rules, 2025.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Indian Insurance Companies (Foreign Investment) Rules, 2015 (hereinafter referred to as the said rules), in rule 2, in sub-rule (1), —
(i) for clause (f), the following clause shall be substituted, namely: —
„(f) “Foreign Direct Investment” (FDI) means the investment by non-resident entities or persons resident outside India and other eligible entities in the equity shares of an Indian Insurance Company under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019:
Provided that for the purposes of these rules, Foreign Direct Investment shall include investment by Foreign Venture Capital Investors (FVCI) as permissible under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019;‟;
(ii) in clause (g), for the letters, word and figures “FEMA Regulation 2000”, the words, brackets and figures “the Foreign Exchange Management (Non-debt Instruments) Rules, 2019” shall be substituted;
(iii) in clause (h), for the words, brackets, figures and letters “sub-regulations (2), (2A), (3) and (8) of regulation of FEMA Regulations, 2000”, the words, brackets and figures “the Foreign Exchange Management (Non-debt Instruments) Rules, 2019” shall be substituted;
(iv) clause (n) shall be omitted.
3. In the said rules, in rule 3, —
(a) for the words “Total Foreign Investment”, the words “Foreign Direct Investment” shall be substituted;
(b) for the words “to exceed seventy-four percent of the paid- up equity capital of such Indian Insurance Company”, the words, figures and brackets “to exceed such per cent. of the paid- up equity capital of such Indian Insurance Company as stipulated by the Insurance Act, 1938 (4 of 1938)” shall be substituted.
4. In the said rules, for rule 4, the following rule shall be substituted, namely: —
“4. In an Indian Insurance Company having foreign Investment, at least one amongst the Chief Executive Officer, managing director and chairperson of its Board, shall be Resident Indian Citizens.”.
5. In the said rules, rule 4A shall be omitted.
6. In the said rules, in rule 5, for the words “seventy-four per cent of the total paid-up equity of the Indian Insurance Company”, the words, figures and brackets “such per cent. of the total paid-up equity of the Indian Insurance Company as provided under the Insurance Act, 1938 (4 of 1938)” shall be substituted.
7. In the said rules, in rule 7, for the words, brackets, figures and letters “sub-regulations (2), (2A), (3) and (8) of regulation 5 of FEMA Regulations, 2000 and”, the words, brackets and figures “the Foreign Exchange Management (Non-debt Instruments) Rules, 2019” shall be substituted.
8. In the said rules, in rule 9, in sub-rule (3), clauses (iii), (v) and (vii) shall be omitted.
[F. No. 13011/19/2013-lns.II]
SHALINI PANDIT, Jt. Secy.
Note : The Indian Insurance Companies (Foreign Investment) Rules, 2015 were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide notification number G.S.R. 115(E), dated the 19th February, 2015 and were subsequently amended by notification numbers G.S.R. 534(E), dated the 3rd July, 2015, G.S.R. 314(E), dated the 16th March, 2016, G.S.R. 619(E), dated the 2nd September, 2019 and G.S.R. 337(E), dated the 19th May, 2021.
