IRDAI Chairman Ajay Seth has emphasised that a reduction in GST rates on insurance premiums would significantly enhance insurance penetration in India. Speaking at the Global Insurance Summit 2025, Seth said the move would act as a catalyst for growth in the insurance sector, particularly in rural and underserved segments.
“Reduction in GST will reduce the burden on policyholders and encourage more people to buy insurance, especially the young and first-time buyers,” said Seth. Currently, life and health insurance products attract GST at 18% and 12%, respectively, which is seen as a deterrent for mass-market adoption.
Seth added that discussions with the finance ministry are ongoing, and the IRDAI is hopeful that GST rationalisation will be considered favourably in the upcoming budget. He also highlighted that the regulator is pursuing reforms to simplify products and processes, promote inclusive insurance, and bring insurers closer to the goal of “Insurance for All by 2047.”
Industry stakeholders echoed Seth’s views, calling the tax cut a much-needed reform.
