An NRI who wants to buy shares of an Indian company can do so without much difficulty today. The challenge arises when the investment becomes large.
Under current rules, Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and certain other overseas investors can buy listed Indian shares without registering as Foreign Portfolio Investors (FPIs) with SEBI, but only up to prescribed limits. Beyond those thresholds, investors may have to use the FPI route, which comes with additional registration, reporting and compliance requirements.
The Reserve Bank of India (RBI) now wants to raise those limits.
As part of its latest policy measures, the central bank announced that NRIs and OCIs will be allowed to invest more in listed Indian companies without SEBI registration. The same facility will also be extended to all individual Persons Resident Outside India (PROIs), widening the pool of eligible investors.
The limits have already been relaxed once this year.
Following Budget 2026, the maximum stake that an individual NRI, OCI or eligible overseas investor can hold in a listed company was increased from 5% to 10% of its paid-up equity capital.
The combined limit for all such investors was also more than doubled from 10% to 24%.
These limits determine how much overseas individuals can invest through the regular NRI investment framework without moving to the more regulated FPI route.
The RBI has now indicated that both limits will be increased further, although the revised thresholds have not yet been disclosed.
For most retail investors, it doesn’t.
But for wealthy individuals, family offices and investors looking to build larger positions in Indian companies, the distinction is important.
The FPI route requires registration, compliance and ongoing reporting obligations. By increasing the non-FPI investment limits, the RBI is effectively allowing overseas investors to deploy larger amounts of capital through a simpler framework.
In practical terms, the move reduces regulatory friction for overseas investors who want greater exposure to Indian equities.
The extension of the facility to all individual PROIs is equally significant. Until now, the relaxation largely benefited NRIs and OCIs. Going forward, a broader set of overseas individuals will be eligible.
The announcement is part of a wider effort to attract foreign capital into India.
Alongside the NRI investment relaxation, the RBI expanded the Fully Accessible Route (FAR) for government securities by including all new issuances of 15-year, 30-year and 40-year bonds.
It also removed certain concentration and short-term investment restrictions for foreign portfolio investors in government securities and introduced temporary incentives for external commercial borrowings (ECBs) and fresh 3-5 year FCNR(B) deposits until 30 September 2026.
The common theme across these measures is clear: make Indian financial markets more accessible to overseas capital.
The RBI has announced the direction of change, but not the final numbers.
The key question is how much the investment limits will be raised from the current 10% individual cap and 24% aggregate cap.
If the increase is substantial, overseas investors could gain significantly more room to invest in Indian companies without entering the FPI regime.
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