In a headline reform aimed at India’s 35-million-strong diaspora, Budget 2026 opened a brand-new channel that lets “persons resident outside India” buy shares on Indian stock exchanges without routing money through registered Foreign Portfolio Investors. Individual ceilings have been doubled: an overseas investor may now own up to 10 per cent of a listed company, while the collective cap for such investors rises to 24 per cent.
The Reserve Bank of India will operationalise the route under its long-standing Portfolio Investment Scheme (PIS). Applicants will complete KYC with a designated bank and receive a unique investor code that links overseas remittance accounts to domestic brokerages. Until now, most NRIs relied on the cumbersome Non-Resident External (NRE) account + PIS combo or pooled funds, limiting flexibility.
![Direct equity access for NRIs and foreign nationals via RBI’s Portfolio Investment Scheme]()
Why it matters for mobility: senior executives on cross-border assignments often receive part of their compensation in stock. The new rules mean that expatriate CXOs working in India can participate directly in employee stock-option plans without complex trust structures. Likewise, returning Indians who retain foreign tax residence can keep investing seamlessly.
Market strategists expect incremental inflows of USD 3-4 billion in FY 2027, supporting liquidity around mid-cap counters. Legal firms caution that anti-money-laundering checks will be strict and that investors must observe sectoral foreign-ownership caps that remain unchanged in sensitive areas such as telecom and defence.
Global employers should review share-plan documentation, ensuring it references the updated PIS route and the 10 per cent threshold. HR should also brief employees on tax residency rules: capital-gains treatment depends on the investor’s residential status under India’s Income-tax Act, not on passport alone.
The Reserve Bank of India will operationalise the route under its long-standing Portfolio Investment Scheme (PIS). Applicants will complete KYC with a designated bank and receive a unique investor code that links overseas remittance accounts to domestic brokerages. Until now, most NRIs relied on the cumbersome Non-Resident External (NRE) account + PIS combo or pooled funds, limiting flexibility.
Why it matters for mobility: senior executives on cross-border assignments often receive part of their compensation in stock. The new rules mean that expatriate CXOs working in India can participate directly in employee stock-option plans without complex trust structures. Likewise, returning Indians who retain foreign tax residence can keep investing seamlessly.
Market strategists expect incremental inflows of USD 3-4 billion in FY 2027, supporting liquidity around mid-cap counters. Legal firms caution that anti-money-laundering checks will be strict and that investors must observe sectoral foreign-ownership caps that remain unchanged in sensitive areas such as telecom and defence.
Global employers should review share-plan documentation, ensuring it references the updated PIS route and the 10 per cent threshold. HR should also brief employees on tax residency rules: capital-gains treatment depends on the investor’s residential status under India’s Income-tax Act, not on passport alone.
Source: The Times of India
