The Central Government has widened access to Indian equity markets by allowing overseas individual investors beyond Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) to invest in listed Indian companies through stock exchanges under the portfolio investment route.
The changes come through amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, notified by the Department of Economic Affairs on June 12.
Under the revised framework, the investment provisions that were previously limited to NRIs and OCIs have been extended to cover any “individual person resident outside India.”
The notification states that, “An individual person resident outside India may, on repatriation basis, purchase or sell equity instruments of a listed Indian company and other securities,” subject to the prescribed conditions.
The amendments also revise the investment limits applicable under this route. According to the updated Schedule III, the shareholding of any individual overseas investor must remain below 10 percent of the total paid-up equity capital of a listed Indian company.
“The total holding by any individual person resident outside India shall be less than ten per cent of the total paid-up equity capital” of the company, the notification said.
At the aggregate level, the combined holdings of all overseas individual investors under this category have also been capped.
The revised rules specify that “the total holdings of all individual person resident outside India put together in the Indian company under this schedule shall not exceed twenty four per cent of the total paid-up equity capital.”
The move effectively broadens India’s pool of potential foreign investors by extending access beyond the NRI and OCI community and increasing the scope for overseas retail participation in domestic equity markets.
The changes are expected to make Indian stocks more accessible to individual investors across global markets, potentially supporting higher foreign portfolio inflows and improving liquidity.
Market participants believe the revised norms could particularly benefit large-cap companies, banks, and businesses with relatively low foreign ownership levels, as these firms may attract a wider base of international investors.
At the same time, the government has retained safeguards linked to national security considerations.
The notification makes it clear that investments resulting in the transfer of ownership or control to entities or citizens of countries sharing a land border with India will continue to require prior government approval.
The amended rules came into effect immediately upon their publication in the Official Gazette on June 12, 2026, marking another step in India’s efforts to deepen capital markets while maintaining regulatory safeguards.
