MoF Notifies Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026.

MoF by Notification dated 02.05.2026, notified the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2026 (“Second Amendment 2026”)¹ to further amend the Principal Rules 2019.

The salient features of the Second Amendment 2026 are as follows:

(i) 100% Foreign Direct Investment in Indian Insurance Companies: The Second Amendment 2026 has revised the limit for foreign direct investment in an Indian insurance company from 74% of total paid-up equity to 100% of total paid-up equity of the Indian insurance company is allowed under the automatic route, subject to approval and verification by Insurance Regulatory and Development Authority (“IRDAI”).

(ii) Requirements applicable to Indian Insurance Companies having foreign investment: Prior to the Second Amendment 2026, an Indian insurance company having foreign investment was required to have: (a) a majority of its directors; (b) a majority of its key management persons; and (c) at least one among the Chairperson