What changed
- RBI has amended the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 through the Third Amendment Rules, 2026 to enable investment in equity instruments of listed Indian companies on a recognised stock exchange by all individual persons resident outside India (previously only NRIs/OCIs).
- Enhanced investment limits have been introduced for foreign portfolio investment in Indian equities (specific limits not detailed in source).
- AD Category-I banks are required to open repatriable INR accounts for individual persons resident outside India to facilitate investment under Schedule III of the Rules.
What it means for you
- This liberalisation aims to attract more foreign investment in Indian equities (not explicitly stated in source but implied).
- AD Category-I banks will need to adapt to the new rules and regulations, ensuring compliance with RBI guidelines and SEBI regulations.
- The enhanced investment limits will provide more opportunities for foreign investors to invest in Indian equities (specific limits not provided).
What you must do
- AD Category-I banks must open repatriable INR accounts for individual persons resident outside India to facilitate investment under Schedule III of the Rules.
- AD Category-I banks must ensure compliance with the provisions of the Rules, Regulations and applicable SEBI regulations.
- AD Category-I banks must put in place appropriate systems and procedures and may obtain required documents/disclosures from the investor to ensure compliance with applicable regulatory requirements.
Who it affects
AD Category-I banks, Individual persons resident outside India
What are the new rules for foreign portfolio investment in Indian equities?
All individual persons resident outside India are now allowed to invest in equity instruments of listed Indian companies on a recognised stock exchange with enhanced limits, subject to RBI guidelines and applicable SEBI regulations.
What are the enhanced investment limits for foreign portfolio investment in Indian equities?
The enhanced investment limits have been introduced (specific limits not detailed in the source circular).
What are the reporting requirements for transactions under Schedule III of the Rules?
The reporting of such transactions and monitoring of investment limits shall be undertaken in the same manner as is presently followed for investments by NRIs/OCIs.