Finance Minister Nirmala Sitharaman, in her Budget 2026 speech, announced a major update for overseas individual investors, including non-resident Indians (NRIs), by easing investment limits in Indian equities under the Portfolio Investment Scheme (PIS). This is aimed at attracting more long-term foreign capital at a time when Indian stock markets are facing sustained selling pressure from global investors.
“Individual Persons Resident Outside India (PROI) will be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme,” Sitharaman said in her budget speech. “It is also proposed to increase the investment limit for an individual PROI under this scheme from 5% to 10%, with an overall investment individual PROIs to 24%, from the current 10%.”
Higher limits mean more room for overseas investors
Under the new provisions, an individual overseas investor can now own up to 10 per cent of a listed Indian company’s paid-up equity, double the earlier limit of 5 per cent. At the same time, the combined holding of all such overseas individuals in a company has been raised sharply to 24 per cent from the previous cap of 10 per cent.
For NRIs, this expands the scope to build meaningful stakes in Indian companies through the portfolio route, without having to rely on more complex foreign direct investment or institutional structures.
What the Portfolio Investment Scheme does
The Portfolio Investment Scheme has long allowed non-resident Indians and other eligible foreign investors to buy and sell shares of listed Indian companies using designated RBI-approved bank accounts. The scheme lays down clear investment limits for each investor and for each company, ensures regulatory compliance, and allows for repatriation of funds.
Until now, PIS participation was largely associated with NRIs. With Budget 2026, the government has explicitly extended and clarified access for all Persons Resident Outside India, making the framework more inclusive for overseas individual investors.
The announcement comes at a crucial moment for Indian equity markets. Foreign investors pulled out a record Rs 1.6 lakh crore in 2025, followed by another Rs 35,962 crore in January 2026 alone, which is a five-month high in outflows. These exits were influenced by concerns over currency weakness and lower post-tax returns in India compared with other global markets.
The Budget 2026 changes mean that overseas individual investors, including NRIs and foreign nationals, now have a simpler and more attractive route to invest directly in listed Indian stocks. With higher ownership ceilings and clearer rules, NRIs can take larger positions in Indian companies through the familiar PIS route.