Move aims to simplify overseas investment and encourage greater participation in Indian equities
The Reserve Bank of India (RBI) has announced a significant relaxation of investment rules for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and other individuals residing outside India, paving the way for increased participation in the country’s stock markets without requiring registration under the Foreign Portfolio Investor (FPI) framework.
The decision is expected to make investing in Indian listed companies simpler and more accessible for overseas investors by reducing regulatory requirements and compliance burdens. The move forms part of broader efforts to attract foreign capital and deepen participation in India’s expanding capital markets.
Under existing rules, overseas investors seeking to make larger investments in Indian equities often needed to register as FPIs with the Securities and Exchange Board of India (SEBI). The RBI’s latest measure is expected to allow higher investment thresholds through simpler channels before such registration becomes necessary.
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The relaxation applies not only to NRIs and OCI cardholders but also to all individual Persons Resident Outside India (PROIs), widening the pool of eligible investors
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Market participants believe the change could lead to stronger capital inflows, improved liquidity and greater investor participation in listed Indian companies
Recent policy changes introduced after the Union Budget 2026 had already increased the individual investment limit for NRIs, OCIs and PROIs from 5 per cent to 10 per cent. The aggregate ceiling for such investors was also raised from 10 per cent to 24 per cent. The RBI’s latest announcement indicates that these limits could be enhanced further, although detailed operational guidelines are yet to be released.
Current regulations continue to impose company-specific and sectoral foreign ownership restrictions. In many cases, an individual NRI’s holding remains subject to prescribed limits, while sectors such as defence retain stricter foreign investment caps.
NRIs typically invest in Indian equities through NRE-PIS, NRO-PIS and NRO Non-PIS accounts, depending on the type of investment activity. These account structures will continue to serve as the primary routes for overseas participation in Indian financial markets.
