Can NRIs Now Invest in Indian Stocks Through the Portfolio Investment Scheme?
Synopsis
In a significant move, the Indian government allows NRIs to invest in stocks via the Portfolio Investment Scheme. This initiative is set to enhance foreign capital inflow, bolster equity markets, and provide NRIs with more investment flexibility. Discover how these new regulations can benefit overseas Indians and strengthen India's financial landscape.
Key Takeaways
Government allows NRIs to invest in Indian stocks.
Increased investment limits for non-residents.
Portfolio Investment Scheme ensures regulatory compliance.
Funds invested can be repatriated.
Initiative aims to boost long-term foreign capital.
New Delhi, Feb 1 (NationPress) On Sunday, the government announced that Indians residing abroad can now engage in stock investments via the Portfolio Investment Scheme (PIS).
Additional measures for non-resident investment were unveiled in the 2026 Budget, which included increasing the individual investment ceiling for Persons Resident Outside India (PROIs) from 5 percent to 10 percent, raising the overall investment threshold for all PROIs from 10 percent to 24 percent, and permitting overseas residents to invest in Indian equities through a portfolio route.
The Portfolio Investment Scheme enables non-resident Indians and foreign investors to purchase and sell Indian stocks using a special bank account sanctioned by the RBI.
This scheme establishes specific limits on how much an investor and a company can invest or receive, ensures adherence to regulatory standards, and allows investors to repatriate their funds.
Investment caps are generally set at 5 percent per individual and 10 percent collectively per company, ensuring compliance with all regulatory guidelines. Moreover, funds invested can be repatriated.
During her Budget speech, Finance Minister Nirmala Sitharaman proposed easing these restrictions for foreign individuals.
She revealed that the cap per investor would be increased from 5 percent to 10 percent, while the overall foreign ownership limit in a company would rise from 10 percent to 24 percent.
The newly introduced regulations will also facilitate investments in Indian equities from Indians living abroad through the portfolio route.
The government indicated that these elevated limits are designed to attract more long-term foreign capital into Indian companies, broadening the investor base.
This initiative is anticipated to draw more stable investment inflows and bolster India's domestic capital markets.
Additionally, the Finance Minister proposed a Rs 5,000 crore allocation for the City Economic Regions scheme and announced a review of Foreign Exchange Management Act (FEMA) regulations concerning non-debt instruments.
Point of View
This announcement marks a pivotal moment in encouraging NRIs to engage with Indian markets. It reflects the government's commitment to fostering a more inclusive investment environment, enhancing economic ties, and ultimately promoting growth within India's financial ecosystem.
NationPress
2 May 2026
Frequently Asked Questions
What is the Portfolio Investment Scheme?
The Portfolio Investment Scheme (PIS) allows non-resident Indians and foreign investors to buy and sell Indian stocks through a special bank account approved by the RBI.
What changes were made to investment limits?
The individual investment limit for Persons Resident Outside India (PROIs) has been increased from 5% to 10%, and the overall investment limit has been raised from 10% to 24%.
Can NRIs repatriate their funds?
Yes, under the PIS, investors can repatriate their funds, ensuring flexibility in managing their investments.
How does this impact the Indian stock market?
This initiative is expected to attract more stable long-term investment flows, thereby strengthening India's domestic capital markets.
What other measures were introduced in the budget?
The Finance Minister also proposed a Rs 5,000 crore outlay for the City Economic Regions scheme and a review of FEMA rules related to non-debt instruments.
