Home ／ Insights on entering the Indian market
2026.03.26
Note that, as a result of the GST reform (GST 2.0) that took effect on September 22, 2025, premiums for individual life and health insurance are now exempt from GST (previously 18%). The effective cost burden has decreased by that amount for expatriates who take out individual health insurance.
India's insurance market is one of the fastest-growing in the world. The health insurance market is estimated at about USD 157.6 billion as of 2025 and is projected to reach USD 322.1 billion by 2034 (a CAGR of 8.27%, per IMARC Group estimates). However, the scope of the definition varies greatly between research firms; on a gross written premium basis, as published by IRDAI (the Insurance Regulatory and Development Authority of India), the market is about USD 14.4 billion, a gap of more than tenfold. When citing market size figures, check which definition the estimate is based on. This growth is being driven by rising medical costs, an increase in lifestyle diseases, growing public awareness of health insurance, and government initiatives.
India's insurance industry is regulated and supervised by IRDAI (the Insurance Regulatory and Development Authority of India). IRDAI is a statutory body established under the 1999 IRDA Act and is responsible for licensing insurers, pre-approving insurance products, regulating the structure of policy terms, and setting rules for claims processing. When a Japanese company operates in India, it needs to understand this IRDAI regulatory framework before formulating an insurance strategy for expatriates and local employees.
At the core of India's public health insurance system is Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY). It is the world's largest public health insurance scheme, covering secondary and tertiary care of up to 500,000 rupees (about 900,000 yen) per year for each eligible household. Since the scheme began, more than 420 million Ayushman cards have been issued, and the FY2025-26 budget allocated a record 9,406 crore rupees (about 170 billion yen).
However, AB-PMJAY is basically a scheme aimed at economically vulnerable Indian citizens, and foreign expatriates and high-income individuals are not eligible. While the scheme is being expanded, such as a proposal in the FY2025 budget to extend coverage to about 10 million gig workers, there is effectively no public insurance scheme available to expatriates of foreign companies. As a result, enrolling in private insurance is effectively mandatory.
The health insurance options that Japanese expatriates posted to India should consider fall mainly into three categories. It is important to accurately understand the characteristics of each and choose the option best suited to the length of assignment, family composition, and health condition.
International health insurance offered by providers such as Allianz Care, Cigna Global, and Aetna International is the most comprehensive option for expatriates. In addition to treatment within India, it also covers care received in Japan or third countries, giving the flexibility to choose treatment in nearby countries such as Singapore or Thailand when advanced medical care is needed. Cashless (direct payment) support through a global network, multilingual support, and 24-hour emergency response services come as standard. Annual premiums are generally in the range of 300,000 to 1,000,000 yen, depending on age and coverage level. Young policyholders with no pre-existing conditions fall into the lower price range, while comprehensive coverage including older individuals and families falls into the higher range.
Health insurance offered by major domestic Indian insurers such as ICICI Lombard, HDFC ERGO, Star Health, and Niva Bupa has relatively low premiums as its biggest advantage. Under IRDAI regulations, all health insurance products come with guaranteed lifetime renewability, and insurers are not permitted to refuse renewal on the grounds of claims history or a policyholder reaching a certain age (except in cases of fraud). A 2024 IRDAI amendment strengthened policyholder protection, for example by shortening the maximum waiting period for certain conditions from four years to three years.
However, the drawback is limited coverage overseas. Many domestic Indian policies cover only medical expenses incurred within India, and coverage for treatment abroad is generally limited to emergencies or life-threatening conditions (such as cancer treatment). Note that medical expenses incurred during temporary trips back to Japan may not be covered.
For short-term business travelers or those on assignment for a few months, travel insurance is an option. It covers emergency medical expenses and medical evacuation, but chronic disease treatment, preventive care, and health checkups are excluded. It is not suitable for long-term postings, but it is practical coverage for employees visiting India on a business-trip basis.
Japanese companies that have established a local subsidiary in India need, as a practical matter, to provide a Group Mediclaim Policy for their Indian employees. Although it is not a legal requirement, offering health insurance has become a de facto necessity for recruiting and retaining good talent.
A typical group health insurance policy covers inpatient treatment costs (including ICU, surgery, medication, and tests), pre- and post-natal care, newborn coverage, and day-care procedures (same-day procedures such as endoscopy and cataract surgery). The coverage amount is often set according to the employee's grade, with common levels of 300,000-500,000 rupees a year for general staff, 500,000-1,000,000 rupees for managers, and 2,000,000-5,000,000 rupees for executives.
Points to consider in designing coverage include how extensive the network hospitals are (especially Tier 2 cities coverage in), the scope of family coverage (spouse, children, parents), the waiting period set for pre-existing conditions, maternity and childbirth-related benefits, and the inclusion of mental health care. In India, insurance coverage for mental health has been expanding since the 2018 Mental Healthcare Act, and it has become an important element of modern insurance design.
There are several practical points to keep in mind when a Japanese company handles insurance procedures in India.
When an expatriate takes out insurance individually, a valid passport, an Employment Visa, proof of residence in India (a rental agreement or FRRO registration certificate), and a medical certificate (from tests designated by the insurer) are generally required. India market entry In the early stages of, it is efficient to arrange insurance in parallel with obtaining the visa.
There are two ways to claim: cashless (paid directly at a network hospital) and reimbursement (you pay first and claim afterwards). At a cashless network hospital, you only need pre-authorization from the insurer on admission, and the out-of-pocket cost on discharge is just the deductible. For reimbursement, you submit receipts, the medical certificate, prescriptions and so on to the insurer. The IRDAI health insurance master circular of May 2024 has cut the processing deadlines sharply: cashless pre-authorization within one hour of the request, final authorization at discharge within three hours, and reimbursement settled within 15 days of the documents being complete.
When choosing insurance, it is necessary to understand the level of healthcare infrastructure at the assignment location. Major cities such as Delhi, Mumbai, Bengaluru, and Chennai have a concentration of large, internationally standard private hospitals such as Apollo Hospitals, Fortis Healthcare, and Max Healthcare, with well-developed English-language service. These hospitals are designated as network hospitals by many international insurers and support cashless treatment.
Meanwhile, Tier 2 cities In smaller cities and rural areas, the quality of medical facilities varies. Because advanced treatment may require transport to the nearest major city, it is necessary to choose insurance that includes medical evacuation coverage. In particular, industrial parks where manufacturing plants are located are often far from city centers, so it is necessary to confirm the emergency response arrangements in advance.
Besides health insurance, there are other insurance categories necessary for operating a business in India.
Under India's Employees' Compensation Act, 1923, there is an obligation to compensate for workplace accidents and occupational diseases. This is especially important in manufacturing, and taking out a Workmen's Compensation Policy is recommended.
D&O insurance covering directors and officers of an Indian subsidiary is an important form of protection in India's litigation-prone business environment. It is strongly recommended especially for listed companies and larger subsidiaries.
Property insurance covering fire, natural disasters, and theft at factories and warehouses, as well as business interruption insurance covering losses from business disruption, are also essential for companies with manufacturing operations.
India's public health insurance scheme, Ayushman Bharat, is basically aimed at economically vulnerable citizens, and foreign expatriates and high-income individuals are not eligible. Because there is effectively no public insurance scheme available to expatriates of foreign companies, enrolling in private insurance is effectively mandatory. Plan on the assumption that you will arrange private insurance to coincide with the assignment.
International health insurance covers care received in Japan and third countries in addition to India, and comes standard with cashless treatment and multilingual support. Domestic Indian insurance, on the other hand, has lower premiums, but coverage for treatment abroad is generally limited to emergencies or life-threatening conditions. The standard approach is to provide international health insurance for expatriates and domestic group insurance for local employees.
Under IRDAI regulations, all health insurance products come with guaranteed lifetime renewability, and renewal cannot be refused on the grounds of claims history or reaching a certain age. Amendments in recent years, such as shortening the waiting period for certain conditions, have strengthened policyholder protection. It is a system that makes it easy to design coverage on the assumption of long-term holding.
Providing group health insurance for Indian employees is not a legal requirement. However, it has become a de facto necessity for recruiting and retaining good talent, and not providing it puts you at a disadvantage in the hiring market. It is common to set the coverage amount according to the employee's grade.
It is not legally required, but in India the burden of family medical costs is a major concern for employees, and family floater-type insurance that includes coverage for parents tends to be preferred. Because designing benefits in line with local customs helps secure talent, the scope of coverage is an important consideration when designing the plan.
Start by clearly separating insurance for expatriates from insurance for local employees, and selecting the appropriate product for each. Because an expatriate's individual enrollment requires a passport, employment visa, proof of residence, and similar documents, it is efficient to arrange insurance in parallel with obtaining the visa. Using an IRDAI-licensed insurance broker makes it possible to compare terms across multiple insurers.
An insurance strategy in India is an important risk management element for preventing business failure. A comprehensive insurance strategy that takes the following points into account is recommended.
First, clearly separate insurance for expatriates from insurance for local employees, and select the appropriate product for each. The common approach is to use international health insurance as the base for expatriates and provide domestic group insurance for local employees. Next, by using an Indian insurance broker (an IRDAI-licensed broker), it is possible to draw out the best terms from multiple insurers.
In addition, cultural gaps Consideration for family coverage is also important. In India, the burden of family medical costs is a major concern for employees, and family floater-type insurance that includes coverage for parents tends to be preferred. localization From this perspective, designing benefits in line with local customs leads to securing good talent. Regular reviews of insurance coverage and staying responsive to changes in IRDAI regulations should also not be forgotten.
MORE
Can Japanese products be placed on India's quick commerce?Will supermarkets in India stock Japanese products?Is wholesaling to India's ubiquitous kirana shops possible?Which malls in India are UNIQLO and MUJI in?Where does sales channel development in India start? How distribution works and how to choose a channelOrders placed in India do not arrive | How to find suppliers of ingredients and materials, and what to do about itSOJAPAN
We support Japanese companies entering India, from market research through local partner development, test sales, and import.