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Foreign Direct Investment (FDI) plays an important role in strengthening financial sectors in developing economies. In India, the insurance industry has gradually opened to foreign participation to attract capital, improve efficiency, and expand insurance coverage. When the sector was liberalized under the Insurance Regulatory and Development Authority Act, 1999, the FDI limit was initially set at 26 percent. This limit was later increased to 49 percent in 2015, 74 percent in 2021, and finally to 100 percent in 2025, marking a major shift in investment policy. This study examines the impact of FDI liberalization on the growth of India's insurance sector using secondary data from 2001 to 2025. Indicators such as insurance penetration, premium growth, and market competition are analysed through regression techniques. The findings show a positive relationship between FDI inflows and sectoral development. Higher foreign investment has improved competition, efficiency, and technological adoption. The study concludes that while 100 percent FDI can accelerate industry growth, effective regulation by the Insurance Regulatory and Development Authority of India remains essential to safeguard policyholders and maintain financial stability.