Girija Subramanian, CMD, New India Assurnace
The government is strengthening the demand side of general insurance business by ensuring that the “Make in India” and biomanufacturing push translates into valuable physical and digital assets that simply cannot afford to go uninsured
This Budget is fundamentally a “builder’s budget”, and will provide a massive growth momentum to the general insurance industry. The government is actively constructing a massive pipeline of new, high‑value assets that will need protection.
The proposal to raise the outlay for the Electronics Components Manufacturing Scheme to ₹40,000 crore, along with the launch of the Biopharma Shakti programme with an allocation of ₹10,000 crore over five years, are structural interventions. These are complex, capital‑intensive facilities and ecosystems that naturally generate demand for high‑sum‑insured “Mega Risk” covers, business interruption insurance, cyber and product liability policies, and specialised engineering lines.
In effect, the government is strengthening the demand side of general insurance business by ensuring that the “Make in India” and biomanufacturing push translates into valuable physical and digital assets that simply cannot afford to go uninsured.
The ₹10,000 crore expansion of the MSME credit guarantee fund will similarly boost demand for trade credit and insurance covers for small enterprises.
On infrastructure, the way the Budget addresses risk is particularly encouraging for insurers. The proposed Infrastructure Risk Guarantee Fund, designed to provide credit guarantees for infrastructure projects, should provide a fillip to the surety and performance insurance market.
The focus on developing City Economic Regions in Tier‑2 and Tier‑3 cities, each with a proposed allocation of ₹5,000 crore over five years, and supported by better connectivity, will help insurers to decentralise their portfolios.
Today, a large share of our business is concentrated in metros such as Mumbai and Delhi; as economic hubs emerge in tier 2/3 cities we have an opportunity to diversify both our commercial and retail books into new markets.
In rural India, the launch of the “Bharat Vistar” multilingual AI platform, which integrates the government’s digital agriculture stack with ICAR’s recommended practices, is equally significant. Coupled with fresh support for livestock, dairy and fisheries value chains through credit‑linked subsidy programmes and strengthened market linkages, this gives insurers the confidence to design more stable, asset‑backed and parametric covers beyond traditional crop‑yield policies.
It opens the door for comprehensive protection around farm machinery, livestock, cold‑chain and aquaculture assets, built on richer data and more resilient rural incomes.
On the capital and international business front, the sector is already on a path to 100% FDI under the recently enacted insurance amendments, which supports long‑term equity inflows into Indian insurers. In this Budget, one of the most important complementary steps for our industry is the extension of tax benefits for entities operating in GIFT City, which enhances its attractiveness as a reinsurance and risk‑management hub for the region.
By making GIFT City more competitive, the policy push encourages us to place and buy more reinsurance capacity within India’s own financial ecosystem. This not only retains premium flows onshore but also deepens domestic expertise in complex risk.
Finally, on the operational side, the tax relief on Motor Accident Claims is a powerful friction‑reducer for both claimants and insurers. The Budget proposes that any interest awarded by Motor Accident Claims Tribunals to a natural person will be exempt from income tax and that TDS on such interest will be done away with.
For accident victims, this means receiving their compensation in full, without erosion through withholding taxes or delays in refunds. For our claims teams, it simplifies and accelerates the settlement workflow, allowing us to focus on swift, humane claim servicing rather than on complex tax calculations and and follow‑up paperwork.
Moreover,the allocation for Ayushman Bharat PM-JAY stands at ₹9,500 crore for FY 2026–27, a 5.5% hike over FY26 revised estimates, reinforcing financial support for its vast hospital network serving low-income families, even as claims management and fraud controls remain priorities.
Full customs duty exemptions on life-saving cancer drugs will ease oncology treatment costs, a top claims driver for health insurers, by making imported targeted therapies more affordable.
The plan to train 1.5 lakh multi-skill geriatric caregivers addresses a critical supply gap in eldercare amid India’s ageing population.
Over time, this infrastructure could enable insurers to develop viable Long-Term Care (LTC) products tailored to rising geriatric needs.
Taken together, this is a Budget that builds assets, de‑risks infrastructure, broadens the spatial footprint of growth, and removes operational bottlenecks.
For the general insurance industry, it offers both immediate efficiencies and a powerful, long‑term pipeline of insurable risk.