Daijiworld Media Network - New Delhi
New Delhi, Feb 1: The Centre on Sunday announced a major boost for overseas Indian investors, stating that Indians living abroad will now be allowed to invest in domestic equities through the Portfolio Investment Scheme (PIS), a move unveiled as part of the Union Budget 2026.
Alongside this, the government introduced a series of reforms aimed at expanding non-resident participation in Indian capital markets. These include doubling the individual investment ceiling for Persons Resident Outside India (PROIs) from 5 per cent to 10 per cent, and sharply increasing the aggregate investment cap for all such investors in a company from 10 per cent to 24 per cent.
The Portfolio Investment Scheme, regulated by the Reserve Bank of India, enables non-resident Indians and eligible foreign investors to buy and sell Indian shares using a designated bank account. The framework ensures compliance with regulatory norms, sets ownership limits, and allows investors to freely repatriate their funds.
Until now, the scheme restricted individual foreign investors to a 5 per cent stake in a company, with total foreign portfolio holdings capped at 10 per cent. In her Budget speech, finance minister Nirmala Sitharaman proposed easing these thresholds to attract a broader pool of global investors and encourage sustained capital inflows.
With the revised limits, overseas Indians will also be able to directly access Indian equities through the portfolio route, significantly widening investment avenues for the diaspora.
According to the government, these measures are designed to draw more long-term and stable foreign capital into Indian businesses, strengthen domestic financial markets, and enhance liquidity by diversifying the investor base.
In addition to these changes, the Finance Minister announced a Rs 5,000 crore allocation for the City Economic Regions scheme and proposed a comprehensive review of Foreign Exchange Management Act (FEMA) regulations governing non-debt instruments, signalling further reforms in India’s foreign investment framework.