Budget 2026:NRIs Can Invest in Indian Stocks via Portfolio Scheme
Budget 2026 opens Indian stock markets wider to NRIs through the Portfolio Investment Scheme, raising limits and easing rules to attract stable foreign investment flows.
Budget 2026 opens Indian stock markets wider to NRIs through the Portfolio Investment Scheme, raising limits and easing rules to attract stable foreign investment flows.
The NRI Portfolio Investment Scheme has taken center stage in Union Budget 2026, as the government moves to attract more foreign capital into Indian equity markets. Finance Minister Nirmala Sitharaman announced that individuals living abroad can now participate more easily in Indian stock markets through the RBI-regulated route.
The policy change comes at a time when markets are seeking stable foreign inflows. Recent capital outflows and global uncertainty have increased pressure to make Indian investments more competitive for overseas investors.
What Is the Portfolio Investment Scheme?
The Portfolio Investment Scheme, commonly known as PIS, allows non-resident Indians and foreign investors to buy and sell Indian shares through a designated bank account approved by the Reserve Bank of India. The scheme ensures that investments follow regulatory guidelines and remain transparent.
Under PIS, transactions move through authorized banks that report trades to the RBI. This framework helps monitor foreign participation while maintaining market stability. Funds invested through the scheme can be repatriated, subject to regulations.
Higher Investment Limits Announced
Budget 2026 introduced major changes to investment caps. The individual investment limit for Persons Resident Outside India has been raised from 5% to 10% per company. The total investment cap for all such investors combined has increased from 10% to 24%.
These changes aim to boost foreign portfolio investment in India and provide deeper liquidity to Indian equity markets. Higher limits also make India more attractive compared to other emerging markets competing for global capital.
Market Context Behind the Move
The announcement comes during a period of mixed signals in global markets. Currency volatility and shifting global interest rate trends have influenced foreign investor behavior. Policymakers want to ensure that Indian markets remain appealing despite external pressures.
Market experts have emphasized the importance of drawing durable foreign flows rather than short-term speculative money. Expanding access for NRIs is seen as a step toward more stable, long-term participation.
FEMA and Regulatory Review
Alongside PIS reforms, the government announced a review of Foreign Exchange Management Act rules related to non-debt instruments. This signals potential simplification of compliance procedures and smoother cross-border investment processes.
Streamlining regulations under FEMA could reduce friction for investors and improve India’s standing as a global investment destination.
Broader Economic Measures
The Finance Minister also proposed a Rs 5,000 crore allocation for the City Economic Regions scheme. While separate from PIS, this initiative aims to strengthen urban economic clusters and improve infrastructure, which can indirectly support corporate growth and investment opportunities.
Why This Matters for NRIs
For many overseas Indians, investing in Indian equities offers both financial returns and a connection to the country’s economic growth story. The updated NRI Portfolio Investment Scheme provides clearer pathways and higher limits, making participation more practical.
The move reflects a broader strategy to position Indian markets as open, well-regulated, and attractive to global investors. As the financial landscape evolves, policy shifts like these could play a key role in shaping capital flows and long-term market confidence.