New Delhi: A day after it secured approval in the Lok Sabha, the Rajya Sabha on Wednesday, December 17, 2025, passed the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, paving the way for 100 per cent Foreign Direct Investment (FDI) in India’s insurance sector. The Upper House also gave its nod to the Repealing and Amending Bill, which removes 71 outdated laws from the statute books. Both legislations were cleared by the Lok Sabha on December 16.
Replying to the debate, Finance Minister Nirmala Sitharaman said the Bill provides a clearly defined regulatory framework for the insurance industry and ensures that premiums collected from Indian policyholders by foreign insurers will remain within the country. She emphasised that the government has put adequate safeguards in place to protect national interests.
The Finance Minister underlined that private insurance companies are already active participants in various welfare initiatives of the Centre. The new law, she said, makes it mandatory for foreign insurers as well to contribute to social sector schemes and government programmes. “We are not allowing them to walk away from these responsibilities,” Sitharaman said.
Explaining the rationale behind raising the FDI cap from 74 per cent to 100 per cent, the Finance Minister noted that several global insurance firms had been reluctant to invest due to challenges in finding joint venture partners. Allowing full foreign ownership would attract fresh investments, increase competition, and ultimately lead to more affordable insurance premiums for consumers, she added.
However, the Bill faced strong opposition from several parties, with demands that it be referred to a select committee due to its wide-ranging impact on the insurance sector.
Leading the opposition’s critique, senior Congress MP Shaktisinh Gohil cautioned that greater foreign participation could pose risks to data privacy, as insurers may seek sensitive customer information such as PAN and Aadhaar details. Drawing parallels with the privatisation of civil aviation, he urged the government to reassess the long-term consequences and send the Bill for further scrutiny.
TMC MP Saket Gokhale also raised concerns, questioning the use of both Hindi and English in the Bill’s title and warning that the legislation could enable foreign companies to extract profits from India’s insurance market.
DMK leader Kanimozhi N.V.N. Somu went a step further, claiming that foreign investors could capture a market share worth nearly $600 billion once the law comes into force. “Instead of strengthening public sector insurers, the government is favouring foreign players and placing an additional burden on domestic companies,” she said.
In addition to the insurance reform, the Rajya Sabha passed the Repealing and Amending Bill, aimed at cleaning up India’s legal framework. Law Minister Arjun Ram Meghwal said the Bill seeks to eliminate 71 obsolete laws, correct drafting errors, and remove discriminatory provisions. “These reforms prioritise ease of living alongside ease of doing business and represent a step away from colonial-era legislation,” he said.
Among the laws proposed to be repealed are the Indian Tramways Act, 1886, the Levy Sugar Price Equalisation Fund Act, 1976, the Bharat Petroleum Corporation Limited (Conditions of Service of Employees) Act, 1988, and several other statutes that have outlived their relevance.
