Archive · 23 Nov 2025
Finance Ministry Reviews Revival of PSU Insurance Merger, Privatisation, and FDI Hike
The Indian government is thinking about merging three big state-owned insurance companies and might sell one of them.
They also want to allow more foreign investment in the insurance business.
These decisions are being reviewed and no final choices have been made yet.
Finance Ministry reassessing merger of Oriental, National, and United India Insurance
Government infused ₹17,450 crore into the three insurers between 2019-20 and 2021-22
Initial merger plan shelved in 2020, now under reconsideration due to improved financial performance
Privatisation of a general insurance company under review as part of government's divestment agenda
Parliament to consider bill raising FDI cap in insurance sector from 74% to 100%
- Who
- Finance Ministry, Oriental Insurance, National Insurance, United India Insurance
- What
- Reviewing merger of PSU insurance companies, considering privatisation, and raising FDI cap
- When
- Currently under review, Parliament session begins December 1
- Where
- India
- Why
- To improve operational efficiency, scale, and insurance penetration
Government Intervention
Market Liberalisation
Merger
Government Intervention
Improves operational efficiency and scale
Market Liberalisation
Potential reduction in competition
Privatisation
Government Intervention
Potential improvement in services and efficiency
Market Liberalisation
Risk of loss of public control and higher prices
FDI Cap Increase
Government Intervention
Encourages foreign investment and deepens insurance penetration
Market Liberalisation
Potential loss of domestic control and cultural impact
- Initial Merger Plan
- Announced in 2018-19 Budget, shelved in 2020
- Capital Infusion
- ₹17,450 crore between 2019-20 and 2021-22
- Privatisation Act
- General Insurance Business (Nationalisation) Amendment Act, 2021
- Proposed FDI Cap Increase
- From 74% to 100%
- Parliament Session
- Winter Session, 15 working days from December 1
