Budget 2025-26 Financial Sector Reforms: Insurance FDI 100%
Why in the news
Finance Minister Nirmala Sitharaman outlined Budget 2025-26 financial sector reforms to attract investment, ease regulation and improve competitiveness over five years.
Key facts
- Insurance FDI: limit lifted from 74% to 100%.
- Pension: a regulatory coordination forum for pension products.
- KYC: overhauled Central KYC Registry by 2025.
- Mergers: simpler procedures, wider fast-track merger route.
- BIT: model reshuffled to suit investors better.
Reform details
| Area | What changes |
|---|---|
| Insurance | 100% only for firms investing the entire premium in India; existing conditions streamlined |
| KYC | Periodic updating made lighter |
| Mergers | Quicker approvals |
| Investment treaties | Aligned with the “First Develop India” vision |
Exam angle
- Earlier insurance FDI cap: 74%; now 100% (conditional).
- Abbreviations: KYC, BIT, FDI.