Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, said the expansion of the Portfolio Investment Scheme signals India’s intent to diversify foreign participation beyond large institutions.
She explained that allowing PROIs to invest directly in equities, while doubling the per-investor limit from 5 per cent to 10 per cent, widens ownership without creating major systemic risks.
Raising the combined foreign holding limit to 24 per cent also increases available space in sectors where investment caps often restrict flows.
Long-term investors help market stability
Srivastava added that overseas individual investors usually stay invested for the long term. This helps improve market liquidity and reduces sharp price swings caused by short-term trading.
Over time, such participation can strengthen price discovery and make Indian markets more resilient.
She said the reform is likely to benefit sectors where stable ownership is important for growth and long-term planning.