New Delhi: In her speech announcing the Union Budget 2026, Finance Minister Nirmala Sitharaman announced a number of foreign investment reforms that could result in attracting more foreign investment to India. Among other initiatives, the government announced that it would be relaxing investment limits for Persons Residents Outside India(PROI) in listed companies.
Broadening access for NRIs and other non-resident investors
The Union Budget 2026 comes with a clear outreach to India’s global diaspora, as Finance Minister Nirmala Sitharaman announced a set of reforms aimed at drawing more NRI and overseas capital into India.
The most significant step in this regard is the proposal to double the individual investment limit for Persons Resident Outside India (PROI), including NRIs, in listed Indian companies from 5 per cent to 10 per cent. A rise in the aggregate cap from 10 per cent to 24 per cent was also announced. This would widen the scope for overseas Indians to undertake significant equity stakes in Indian firms.
The Budget also reaffirmed support for the Portfolio Investment Scheme (PIS) route. The Portfolio Investment Scheme (PIS) allows non-resident Indians and foreign investors to buy and sell Indian stocks through a special bank account approved by the RBI. The announcement comes at a critical juncture for Indian stock markets, as foreign investors pulled out Rs 19 billion in 2025 and another Rs 4 billion in January 2026.
Another related announcement pertains to the government’s plan to simplify the Foreign Exchange Management Act (FEMA) rules, specifically targeting Non-Debt Instruments (NDI) and Overseas Investments (OI). The goal with this would be to move from a control and restriction mindset to one of facilitation. The Union Budget 2026 thus attempts to make India a more attractive destination for long-term diaspora capital.