The Reserve Bank of India (RBI) has announced a significant relaxation in investment norms for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs), increasing the limits for investments in equity instruments traded on Indian stock exchanges as reported by The Economic Times.
According to The Economic Times, the move is aimed at broadening participation in India's capital markets and strengthening engagement with the global Indian diaspora.
RBI Governor Sanjay Malhotra, on Friday, announced that the investment limits for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) in equity instruments traded on stock exchanges without Securities and Exchange Board of India (SEBI) registration will be increased.
As reported by The Economic Times, the revised framework is expected to make Indian equity markets more accessible to overseas investors while encouraging greater capital inflows from individuals residing outside the country.
The policy change reflects the RBI’s efforts to simplify investment opportunities for Indians abroad and other eligible overseas individuals.
Under the existing rules, an individual NRI or OCI is permitted to invest up to 5% of the paid-up equity capital of a listed Indian company through the Portfolio Investment Scheme (PIS).
Additionally, the combined investment by all NRIs and OCIs is restricted to 10% of the company's paid-up capital. According to The Economic Times, the RBI has now proposed raising the individual investment ceiling to 10%, while increasing the aggregate limit to 24%.
The Economic Times further reported that the facility will no longer be limited to NRIs and OCIs alone. It will also be extended to all individual Persons Resident Outside India (PROIs), thereby widening the category of overseas investors who can directly participate in Indian equity markets through stock exchanges.
The decision is expected to provide a boost to foreign portfolio participation at a time when India continues to attract strong global investor interest.
As noted by The Economic Times, expanding investment access for overseas Indians and other foreign-resident individuals could contribute to deeper market liquidity and increased capital market activity.
The RBI's announcement comes against the backdrop of consistently strong remittance inflows into the country. According to data cited by The Economic Times, inward remittances to India have exceeded $100 billion annually in recent years, making the country one of the largest recipients of remittances globally.
The central bank believes that easing investment restrictions and broadening eligibility norms will help channel a greater portion of overseas savings into Indian financial markets.
The Economic Times reported that the changes underscore the growing importance of the Indian diaspora and global investors in supporting the country's economic and financial ecosystem.
With the revised limits and expanded eligibility criteria, the RBI's latest move is expected to strengthen the connection between overseas investors and India's rapidly evolving capital markets, while creating new opportunities for long-term participation in the country's growth story.
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