In a significant move aimed at improving the ease of doing business and deepening India’s capital markets, Union Finance Minister Nirmala Sitharaman on Sunday announced major liberalisation measures for Persons Resident Outside India (PROIs) while presenting the Union Budget 2026–27 in Parliament.
As part of the government’s broader push to attract overseas capital and simplify investment frameworks, individual PROIs will now be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS). This marks a notable expansion of direct market access for overseas individual investors.
The Finance Minister further announced a substantial enhancement of investment limits under the scheme. The individual investment cap for a single PROI has been increased from 5 per cent to 10 per cent of a listed company’s equity. In addition, the aggregate investment limit for all individual PROIs has been raised sharply from the existing 10 per cent to 24 per cent, allowing greater cumulative foreign participation.
These changes are intended to simplify regulatory structures and reduce entry barriers for overseas investors, particularly members of the Indian diaspora and foreign individuals seeking direct exposure to Indian equity markets. By allowing higher ownership thresholds, the government aims to make India’s capital markets more attractive, liquid, and globally competitive.
Under existing rules, overseas individual investors often faced restrictive limits and complex compliance requirements, which curtailed meaningful participation. The revised framework is expected to streamline processes and align India’s portfolio investment regime more closely with international best practices.
A Person Resident Outside India, as defined under the Foreign Exchange Management Act (FEMA), includes non-resident Indians, overseas citizens of India, foreign nationals residing abroad, and other individuals who do not meet India’s residency criteria. The enhanced limits will allow such investors to take larger stakes in listed Indian companies, subject to sectoral caps and regulatory safeguards.
Market experts believe the move will broaden the investor base, improve liquidity, and support long-term capital formation, particularly at a time when India is positioning itself as a preferred destination for global investment. Increased participation by overseas individuals is also expected to enhance price discovery and stability in equity markets.
The announcement forms part of the government’s wider agenda in Budget 2026 to strengthen ease of doing business, promote financial market reforms, and encourage sustained foreign capital inflows. By liberalising portfolio investment norms for individuals, the Centre has signalled its intent to further integrate Indian markets with the global financial ecosystem.
The proposed changes will come into effect following necessary amendments to FEMA regulations and detailed operational guidelines to be issued by the Reserve Bank of India and market regulators.
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