Finance Ministry Unveils Major Reforms to Strengthen Foreign Portfolio Investment (FPI) in Equity Segment:

India has eased investment norms for overseas individuals and increased investment limits to attract stable long-term foreign capital and strengthen its capital markets.

Govt Eases Foreign Investment Rules to Boost Capital Market Inflows

Saloni Kumari

Jun 6, 2026

Last update on Jun 6, 2026

Finance Ministry Unveils Major Reforms to Strengthen Foreign Portfolio Investment (FPI) in Equity Segment The Government of India had previously made a commitment to reinforce the nation's position as a leading global investment destination and make the capital market stronger. In line with the same commitment, the Ministry of Finance has adopted certain measures to facilitate investment for Individual Persons Resident Outside India (PROIs) and Foreign Portfolio Investors (FPIs) and to attract stable long-term foreign capital flows. Similarly, some reforms have been introduced to make foreign investment in equities and G-Secs more accessible, efficient, and globally competitive. This move is a part of the government's larger initiative to ease doing business in capital markets. Liberalisation of investment by individual persons resident outside India (PROIs) under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019: On February 01, 2026, the finance minister of India, Nirmala Sitharaman, presented the Union Budget 2026-27, where Persons Resident Outside India (PROI) were permitted to make investments in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS), which was hitherto available only to NRIs/OCIs. The investment limit for an individual PROI under this scheme was also increased to 10% from 5% in any firm, with an overall investment limit from 10% to 24%. The Department of Economic Affairs (DEA) under the Ministry of Finance has also issued the Foreign Exchange Management (Non-Debt Instruments) (Third Amendment) Rules, 2026, to implement the same limit. These rules aim to make it easier for NRI (Non-Resident of India) and OCI (Overseas Citizen of India) investors to invest in India by using the existing registration systems. Simpler onboarding and fewer compliance requirements will improve ease of doing business and encourage more individual foreign investors to participate. This is anticipated to bring higher and more stable foreign investment into the stock markets of India. Refer to the official press release for complete information.

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Saloni Kumari

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Saloni is a Content Writer with 2+ years of experience at studycafe.in. She writes legal, taxation, and finance related content including GST, Income Tax etc. Skilled in translating complex judicial pronouncements and regulatory developments into clear, and reader-friendly articles. Experienced in covering judgements of ITAT, High Court, GSTAT, and news related to Income Tax, GST, and corporate law. She can be reached at [email protected].