India opens ins. sector to 100% foreign ownership — but keeps silos intact

India has cleared the way to raising the foreign direct investment (FDI) cap in the ins. sector to 100% from 74%, News on Air reports.

What didn’t change: The government dropped a major “composite license” reform clause that would have allowed a single ins. provider to offer all ranges of ins. products from life to health. Current rules do not permit life ins. providers to offer other ins. products like health coverage. These products are only offered by general insurers, creating a fragmented and siloed market for companies.

Gulf sovereign wealth funds (SWFs) have been making inroads in India’s ins. sector of late. The Abu Dhabi Investment Authority picked up a 9.99% stake in Aditya Birla Health Ins. in 2022. In 2024, Qatar Ins. Company partnered with Mumbai-based Cosmea Financial Holdings and other investors to form a new general ins. joint venture, with QIC expected to hold roughly a 40% stake.

What it means: For SWFs and private equity firms already holding stakes in Indian firms, they can now own 100% of the pie, with some limitations. While global players like Prudential, Sun Life, and AIG can now exit or expand joint ventures for full control, they face new guardrails—at least one top executive must be an Indian citizen. Additionally, the new law gives the ins. regulator wider powers to set agent commissions, enforcement, mergers, and policyholder protection.

Why it matters: The reform targets a sector where ins. penetration declined to 3.7% of the GDP, implying fewer people are buying ins. relative to the country’s economic growth.

What now? Foreign partners in India’s 74 ins. firms — of which only four currently hit the 74% cap — are expected to evaluate buyouts of local partners.

Parliament clears law to open civil nuclear power sector to private firms

Liberalizing the nuclear sector: India’s parliament on Thursday cleared a new legislation to open the country’s civil nuclear power sector to private companies, ending decades of near-exclusive state control, Reuters reports. The legislative shift is designed to help India hit a massive 100 GW nuclear capacity target by 2047, up from just 8 GW today.

Government spending: The Modi government has pledged over USD 2 bn toward nuclear research and allied activities in recent months, as the government looks to expand non-fossil power sources and reduce reliance on coal.

OUR TAKE- Nuclear projects are the ultimate long-dated infrastructure assets. For Gulf SWFs looking for 20-30 year yields, India’s move to allow up to 49% FDI in nuclear power projects creates a structured entry point into India’s base-load power market that didn’t exist six months ago.