India, Feb. 14 -- In December 2025, the Parliament passed an Act to allow 100 per cent foreign holding in the insurance sector. However, when the rules for it were finalised a couple of days ago, there were unexpected surprises, which went largely unnoticed in the diatribes about the bilateral trade deals with the US, and European Union. The rules allow the Government to create a special window, and sell up to 20 per cent stake in LIC, the state-owned near-monopolist in life insurance, to foreign owner(s). This will happen under the automatic route, and may possibly curtail discussions. Today, 3.5 per cent of LIC's stake is held publicly, and Sebi wants the public holding to be 10 per cent by May 2027.

Selling a fifth of the stake, altho...