Indians living abroad will have expanded access to Indian equity markets following Budget 2026 announcements that relax limits under the Portfolio Investment Scheme, a move aimed at drawing more stable foreign capital into domestic companies. The government said the individual investment cap for Persons Resident Outside India will rise from 5 per cent to 10 per cent, while the overall limit for all such investors in a company will increase from 10 per cent to 24 per cent.
The Portfolio Investment Scheme allows non-resident investors to buy and sell Indian shares through special RBI-approved bank accounts, with defined regulatory safeguards and repatriation provisions. By widening these limits, policymakers seek to broaden the investor base and strengthen capital markets with longer-term flows rather than volatile short-term investments.
Finance Minister Nirmala Sitharaman said the revised framework will also allow residents living abroad to invest in Indian equities through the portfolio route more easily. The scheme sets clear transaction norms and compliance requirements, ensuring investments remain within prescribed caps while giving investors the ability to repatriate funds.
The higher limits are expected to benefit Indian companies by increasing access to overseas individual investors, potentially supporting market depth and liquidity. The changes come alongside other Budget measures linked to financial sector reforms, including a proposed review of Foreign Exchange Management Act rules related to non-debt instruments.
The government framed the move as part of efforts to integrate Indian markets more closely with global capital while maintaining regulatory oversight. By expanding participation from Indians overseas, policymakers aim to tap into diaspora savings and channel them into domestic growth opportunities.
