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India Opens Doors: NRI Investment Limits Soar
1 Feb
Summary
- NRI investment cap doubles to 10% for individuals.
- Aggregate foreign investor limit rises to 24%.
- Move aims to attract stable, long-term capital.
The Union Budget has dramatically enhanced investment thresholds for non-resident individuals (NRIs) and overseas investors seeking direct stakes in Indian listed companies. Effective immediately as of February 1, 2026, individual investment limits under the Portfolio Investment Scheme (PIS) have doubled from 5% to 10%.
Furthermore, the aggregate investment limit for all overseas investors has been increased from 10% to 24%. Previously, lower caps restricted direct shareholding, channeling most foreign equity through institutional routes like Foreign Portfolio Investors (FPIs). This structural shift aims to diversify India's capital base.
Analysts suggest this change will encourage greater NRI participation in fundamentally strong companies. The government's objective is to foster longer-term capital inflows, enhance market depth, and potentially reduce market volatility. The actual impact will also hinge on regulatory clarity and overall market sentiment.
