Union Budget 2026: Direct Equity Access for NRI Investors by Increasing Investment Limit to 10%

In a significant reform announced in the Union Budget 2026, Finance Minister Nirmala Sitharaman on Sunday unveiled plans to liberalise equity investment norms for persons resident outside India (PROI). The proposal seeks to raise the individual shareholding cap from 5% to 10%, while increasing the aggregate limit from 10% to 24%. Additionally, the government plans to introduce a direct equity investment pathway for overseas individuals under the Portfolio Investment Scheme (PIS).

This reform enables overseas investors to invest directly in Indian listed companies, removing the need to route investments through registered foreign portfolio investors (FPIs) or limited non-resident Indian (NRI) channels. The expanded PROI category includes NRIs, Overseas Citizens of India (OCI) cardholders, foreign nationals, and entities incorporated outside India.

What Does This Mean for Overseas Investors?

Currently, the bulk of foreign capital entering Indian equity markets flows through FPIs or designated NRI routes, both of which often involve multiple intermediaries and complex compliance requirements. For individual investors based overseas, these layers have traditionally acted as a barrier to direct market participation.

Also Read: Union Budget 2026: Deadline for Revised ITR Filing Extended to March 31

How Will the New Framework Operate?

Under the proposed changes, the government aims to establish a regulated and standardised investment route that allows overseas individuals to participate in Indian equity markets more directly. By simplifying access and reducing structural friction, the new PIS-based mechanism is expected to broaden the investor base while maintaining regulatory oversight.

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