Finance Minister Nirmala Sitharaman began her eighth consecutive budget presentation on February 1, 2025, emphasizing the government’s sustained efforts to accelerate growth, secure inclusive development, and boost household sentiment. The budget speech, presented in Parliament at 11 a.m., aims to uplift India’s economic prospects while remaining fiscally disciplined.
This year’s budget comes at a time when India’s economy is projected to grow between 6.3% and 6.8% in 2025-26, according to the Economic Survey for 2024-25. The survey, tabled in Parliament on January 31, reflects optimism regarding India’s post-pandemic recovery but emphasizes the need for sustained reforms to achieve long-term economic stability.
In a major policy shift, Sitharaman announced that the Foreign Direct Investment (FDI) limit in the insurance sector will be raised from 74% to 100%, following the November 2024 consultation paper issued by the Union Finance Ministry. Previously, the FDI limit was increased from 49% to 74% in February 2021, and this latest hike aims to further open up the sector to global investments.
Union finance minister Nirmala Sitharaman said, “The FDI limit for the Insurance Sector will be raised from 74 to 100 percent. This enhanced limit will be available for those companies which invest the entire premium in India.”
FM added, “The current guardrails and conditionalities associated with foreign investment will be reviewed and simplified.”
“In this regard, a comprehensive review of the legislative framework governing the sector has been conducted in consultation with the Insurance Regulatory and Development Authority (IRDAI) and the industry. The proposal includes raising the FDI limit in Indian insurance companies from 74 per cent to 100 per cent, and enabling an insurer to carry on one or more classes of insurance business, as well as activities related or incidental to insurance,” an office memorandum dated November 26 stated.
