The Centre of Indian Trade Unions (CITU) strongly condemns the Insurance Laws (Amendment) Bill, 2025, tabled in the Lok Sabha, and calls upon the working people, policyholders, and all democratic forces to oppose this retrograde legislation highly detrimental to national interests.
A careful reading of the Bill makes it clear that the Government proposes sweeping amendments to the Insurance Act, 1938, the Life Insurance Corporation Act, 1956, and the IRDA Act, 1999. Cloaked under the misleading and deceptive title “Sabka Bima Sabki Raksha”, the Bill is yet another attempt by the Government to mask a pro-corporate, pro-foreign capital agenda behind pro-people rhetoric.
The most dangerous provision of the Bill is the proposal to permit 100% foreign direct investment in insurance companies, including portfolio investors. CITU categorically rejects the claim that this move will strengthen the insurance sector or benefit policyholders. On the contrary, it will hand over India’s precious domestic savings to foreign capital, undermining national economic sovereignty.
Domestic savings are the backbone of economic development. As a welfare state, India must retain public control over these savings to fulfill its constitutional obligations. Allowing 100% foreign ownership will weaken this control and expose the savings of millions of workers and middle-class families to the profit-driven interests of global finance capital.
The Government’s argument that higher FDI is required for growth is completely baseless. Official data presented in Parliament itself show that foreign equity in the insurance sector stands at only 32.67% against the permissible limit of 74% as of March 2024. Since the FDI cap was raised to 74%, only a handful of companies have utilised this limit, while several major insurers have no foreign equity at all.
This clearly establishes that the existing FDI ceiling is not a barrier to growth. Raising it to 100% is therefore neither economically justified nor required for sectoral expansion. Rather it paves the way foreign take-over of Indian insurance companies, thereby peoples’ savings through insurance policies in the concerned taken-over entities.
The Bill will seriously destabilise the insurance industry. If foreign partners withdraw from joint ventures to operate independently, domestic companies will be weakened or pushed out. Past experience shows that at least nine foreign insurers have already exited the Indian market, leaving policyholders in uncertainty.
Foreign capital enters purely for profit maximisation. Its focus will inevitably be on high-value and high-margin segments, catering to the wealthy. This will force domestic insurers to abandon social and developmental insurance, severely undermining coverage for workers, the lower middle class, rural populations, and marginalised sections.
CITU strongly rejects the illusion that higher FDI will increase insurance penetration. Life insurance penetration depends on disposable incomes, while general insurance depends on asset ownership. With stagnating wages, rising unemployment, and widening inequality, neither condition exists in India today.
It is the public sector, particularly LIC and Public Sector General Insurance Companies, that has ensured relatively better insurance penetration despite economic constraints. Instead of strengthening these institutions, the Government is systematically weakening them.
By extending fuller application of the Insurance Act, 1938 to LIC through amendments to Sections 30A and 43 of the LIC Act, the Bill seeks to push LIC towards private-sector-style commercial benchmarks. This threatens LIC’s unique social-security role, its commitment to universal insurance, and the employment security of its workforce.
CITU warns that this is a step towards the gradual corporatisation and eventual privatisation of LIC, which will have grave consequences for policyholders, employees, and the broader economy.
CITU demands the immediate withdrawal of the Insurance Laws (Amendment) Bill, 2025. The Government must abandon its blind pursuit of neoliberal policies that prioritise corporate profits over public interest. Instead, it must strengthen public sector insurance institutions, expand social security coverage, protect employment, and ensure that domestic savings serve national development goals.
CITU calls upon trade unions, policyholders’ associations, and all democratic forces to unite in resistance against this anti-people and anti-national legislation.
Issued by
Tapan Sen
General Secretary
