Govt to allow persons resident outside India to invest in domestic equities

Government Proposes to Boost Equity Market Liquidity with New Investment Scheme

In a move aimed at increasing liquidity in the equity capital market, the government has proposed a new investment scheme that will allow Indian non-residents to invest in domestic stocks.

Key Highlights of the Proposed Scheme

• Individuals resident outside India (PROI) will be permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme.
• The investment limit for an individual PROI under this scheme will be increased from 5 per cent to 10 per cent.
• The overall investment limit for all individual PROIs will be increased from 10 per cent to 24 per cent.

Finance Minister Nirmala Sitharaman made the announcement as part of the ease of doing business measures in her Union Budget 2026-27 speech.

Expert Reactions

Experts have welcomed the move, saying it can help increase inflows and stabilise the Indian currency.

• Himanshu Srivastava, Principal, Manager Research at Morningstar Investment Research India said that allowing individuals resident outside India to invest domestically appears to be a positive reform.
• Manoj Purohit, Partner, Financial Services Tax, Tax & Regulatory Advisory at BDO India said that the welcoming measure will not only increase inflows but also help stabilise the currency and capital markets.
• Dhruv Chopra, Managing Partner, Dewan PN Chopra & Co said that the regulatory shift is designed to reduce the market's reliance on volatile institutional hot money by courting stable, long-term individual investors.

However, experts also caution that the wide-ranging implications of the announcement can be assessed only after more details are out.

Until operational details emerge, investors should view this as a directional signal rather than a near-term catalyst, Himanshu Srivastava noted.