Skip to content

Budget 2025-26 Financial Sector Reforms: Insurance FDI 100%

3 February 20251 min read
BANKING & FINANCEBudget 2025-26Financial SectorReforms: InsuranceFDI 100%3 February 2025safalsetu.com

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

AreaWhat changes
Insurance100% only for firms investing the entire premium in India; existing conditions streamlined
KYCPeriodic updating made lighter
MergersQuicker approvals
Investment treatiesAligned with the “First Develop India” vision

Exam angle

  • Earlier insurance FDI cap: 74%; now 100% (conditional).
  • Abbreviations: KYC, BIT, FDI.

Test yourself

1. Budget 2025-26 raised the FDI limit in insurance from 74% to what level?

The cap went up to 100% for firms investing premium within India.

2. The 100% insurance FDI announced in Budget 2025-26 applies only to companies that do what?

The condition is investing all premium in India.

3. Which overhauled facility was announced by 2025 to ease customer verification in Budget 2025-26?

An overhauled Central KYC Registry was promised.