India Opens Investment In Listed Equity Instruments To All Overseas Individuals
The Centre has expanded access to India's listed equity markets by allowing all individuals resident outside India to make portfolio investments in listed Indian companies on a repatriation basis. Previously, this facility was available only to Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs)
The change comes through the Foreign Exchange Management (Non-Debt Instruments) (Third Amendment) Rules, 2026, notified by the Ministry of Finance on June 12, 2026. Through the amendment, references to NRIs and OCIs in Chapter V and Schedule III of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 have been replaced with the broader category of "individual person resident outside India."
As a result, any individual residing outside India can now purchase and sell equity instruments of listed Indian companies on a repatriation basis through recognised stock exchanges in India, subject to prescribed investment limits and conditions. The framework also permits such investors to transfer their holdings by way of sale or gift to another person resident outside India.
The amended rules retain India's existing national security safeguards. Any investment or transfer that results in the ownership or control of a listed Indian company passing to entities or citizens of a country sharing a land border with India will require prior Government approval. The same approval requirement applies where the beneficial owner of the investment is a citizen of such a country.
Under the revised regime, an individual investor resident outside India may hold less than 10% of the paid-up equity capital of a listed Indian company under the portfolio investment route. The aggregate holding of all such investors in a company cannot exceed 24%, unless otherwise permitted under the applicable framework.
The rules also prescribe a mechanism for dealing with breaches of the individual investment limit. If an investor's holding exceeds the prescribed threshold, the excess must be divested within five trading days from the settlement date of the transaction that caused the breach. Failing such divestment, the investor's entire holding in the company will be reclassified as **foreign direct investment (FDI)**, and the investor will not be permitted to make further portfolio investments in that company.
To operationalize these changes, the Reserve Bank of India (RBI) has amended the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019.
The RBI amendments update the payment, remittance, and reporting framework and align the regulatory provisions with the revised Schedule III investment regime.