Key Details
The OECD’s FDI Regulatory Restrictiveness Index 2025 compares statutory restrictions on foreign direct investment (FDI) that were in force at the end of December 2025. Its India finding concerns specific insurance-sector rules and not a measure of investment actually received.
Global picture: The average score rose marginally from 0.1192 in 2024 to 0.1194 in 2025; a higher score means greater measured restrictiveness. Scores were unchanged in 95 economies, fell in seven—including India—and rose in four.
Insurance management: Rules effective 30 December 2025 removed the requirement that most directors and key management personnel of an Indian insurance company with foreign investment be resident Indian citizens. At least one of its chief executive, managing director or board chair must still meet that requirement.
Dividend repatriation: Insurance intermediaries with majority foreign shareholding no longer need prior IRDAI permission to repatriate dividends.
Main barrier measured globally: Foreign-equity limits accounted for an average 61% of measured restrictiveness across economies. That is a share of the index score, not a share of FDI flows.
India’s Change Is Specific to Insurance Operations
The India measures give foreign-invested insurers more flexibility in appointing directors and senior managers, while retaining a resident-Indian requirement for one top leadership position. They also remove an approval step for dividend repatriation by majority foreign-owned insurance intermediaries.
These are the 2025 changes recorded by the OECD. They should not be described as a broad opening of all Indian sectors to foreign ownership, or as evidence that insurance investment has already increased.
More Liberalisation Did Not Lower the Global Average
Seven economies recorded a net easing of restrictions and four recorded a net tightening. The OECD finds that the tightening measures were larger on average, producing a very small increase in the overall score. Most economies made no change at all.
Measured restrictions remain uneven. The average score was 0.0509 for OECD economies and 0.1576 for non-OECD economies. Across the full sample, restrictions were generally higher in activities such as media, real estate, transport and professional services than in most manufacturing activities. These are global sectoral patterns, not a finding that India changed its rules in those sectors in 2025.
The Index Measures Rules, Not the Whole Investment Climate
The index scores barriers such as foreign-equity limits, investment approvals and restrictions on foreign personnel. It does not measure realised FDI, regulatory predictability or every policy affecting investors. Cross-sectoral national-security screening is also outside its score, even though the OECD notes its growing use internationally.
That boundary matters when reading India’s result: a lower restrictiveness score records a regulatory easing, but cannot establish its effect on investment, competition or insurance coverage.
Policy Relevance
India’s insurance changes illustrate a form of targeted liberalisation: removing management and procedural restrictions without eliminating domestic regulatory oversight. Their practical importance lies in whether they make it easier for foreign-invested insurers and intermediaries to operate and commit capital.
For wider FDI policy, the OECD’s comparison offers a way to identify which statutory barriers remain, sector by sector. Decisions to retain or change them still require a separate assessment of their purpose and effects; the index alone does not show that every restriction is unnecessary.
Follow the Full OECD Paper Here: OECD, FDI Regulatory Restrictiveness Index 2025: Key Findings and Trends