Budget 2026 opens wider doors for NRI investors, strengthens long-term foreign capital, improves market liquidity and aligns Indian equities with global portfolios through expanded limits, simpler rules and a more stable investment framework.
Budget 2026 has introduced a series of measures aimed at making it easier for Non-Resident Indians (NRIs) to invest directly in Indian markets. Industry experts say the changes could significantly deepen India’s pool of long-term, stable capital at a time when foreign portfolio investor inflows have slowed.
Direct Access to Equities
Until now, a single NRI could own up to 5 per cent to 10 per cent of a company’s paid‑up capital. Under the new budget, this limit has been raised to 10 per cent, with the total cap for all NRIs combined increased to 24 per cent.
Implications for Ownership and Strategy: Portfolio Investment Scheme
Previously, many non‑resident investors accessed Indian equities mainly through foreign portfolio investors or specific NRI routes. Budget 2026 proposes to allow overseas residents, including NRIs and foreign citizens, to invest directly in Indian stocks under a regulated portfolio investment scheme. This aims to simplify access and broaden participation in domestic markets.
Tax Relief for Foreigners
For NRIs considering investment in India, these changes offer greater scope and flexibility. Additionally, foreign nationals residing in India for up to five years get relief on non-India earnings, announced the FM.
Implications for Ownership and Strategy
The increase from 5 per cent to 10 per cent for individual holdings enables NRIs to take more meaningful stakes in companies than before. According to investment analysts, such larger shareholdings can influence price discovery and market depth, potentially improving liquidity and engagement by global Indian capital.
Automated Process for Small Taxpayers
Finance Minister Nirmala Sitharaman outlined a new scheme for small taxpayers. “I propose a scheme for small taxpayers wherein a rule-based automated process will enable obtaining a lower or nil deduction certificate. Instead of filing an application with the assessing officer for the ease of taxpayer holding securities in multiple companies, I propose to enable depositaries to accept Form 15 G or Form 15 h from the investor and provide it directly to various relevant companies”, said the FM. This measure is expected to simplify compliance and reduce administrative delays.
In Crux With Other Measures Announced in Budget 2026:
• Raising the individual investment limit for Persons Resident Outside India (PROIs) from 5% to 10%.
• Increasing the overall investment limit for all PROIs from 10% to 24%.
• Allowing residents living abroad to invest in Indian equities via a portfolio route.
The Finance Minister proposed a Rs 5,000 crore outlay for the City Economic Regions scheme. She also announced a review of Foreign Exchange Management Act (FEMA) rules related to non-debt instruments.
