Overseas individuals can raise equity investment to 10% from current 5% through PIS in listed stocks: Budget 2026

Union Budget 2026 has proposed allowing Individual Persons Resident Outside India (PROI) to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS). It is also proposed to increase the investment limit for an individual PROI under this scheme from 5% to 10%, with an overall investment limit for all individual PROIs raised to 24%, from the current 10%.

The decision to raise the investment limit for Persons of Indian Origin (PROI) in Indian listed companies from 5% to 10%, with the aggregate limit increased to 24% from 10%, reflects a calibrated approach to capital market liberalization aimed at broadening the equity capital base, says Pratik Shah, National Financial Services Leader, EY India.

Liberalization under the Portfolio Investment Scheme (PIS) for Persons Resident Outside India (PROIs)

According to Atul Shinghal, Founder & CEO, Scripbox, Budget 2026 introduces a major liberalization under the Portfolio Investment Scheme (PIS) for Persons Resident Outside India (PROIs) (including NRIs, OCIs, and other overseas residents). Key Changes include:

• Individual Investment Cap: Doubled to 10% (from 5%) of a listed Indian company’s paid-up equity capital.
• Aggregate Investment Cap: Raised to 24% (from 10%) for all PROIs combined.

This move simplifies direct equity access under FEMA regulations. The key benefits for PROIs include:

• Greater Flexibility: The 10% cap allows individual PROIs and family offices to build meaningfully larger, more concentrated, long-term holdings in Indian companies.
• Expanded Headroom: The 24% aggregate cap reduces the risk of foreign ownership ceilings being hit, preventing forced selling and facilitating easier collective participation.
• Simpler Access: Investing via PIS-linked accounts is now more seamless, lowering entry barriers, compliance costs, and time lags.
• Market Support: Easier inflows, over 2-3 years, are expected to improve liquidity and potentially enhance returns through a valuation uplift.

This is a strongly positive reform, enhancing PROIs' ability to participate in India's equity growth story with greater scale, simplicity, and confidence, he continues.

According to Mitesh Shah, CEO, Equirus Family Office, the Budget move has opened investment doors wider for foreign investors. He says: One of the most market-positive announcements is the widening of equity market access for individuals resident outside India. Here's where things get interesting for markets. The Budget allows individuals resident outside India to invest directly in Indian equities—with investment limits raised from 5% to 10% per company, and the aggregate ceiling pushed to 24%.

"This represents a structural shift, not a marginal tweak. Until now, foreign capital largely flowed through institutional channels—FPIs, offshore funds, the usual suspects. By opening direct access to individuals, India is diversifying its capital base. That should, over time, reduce volatility, improve liquidity and bring longer-duration money into the market. The relentless FII outlows were a cause of concern for the markets. For domestic investors, it further reinforces India’s positioning as a core allocation within global portfolios, rather than a tactical emerging-market trade."

Gaurav Seth, CEO, 5paisa, described easing of norms for PROIs by allowing investments in equity instruments as a positive.

According to Rajarshi Dasgupta, Executive Director - Tax, AQUILAW: “Individual persons resident outside India will be permitted to invest in equity through the Portfolio Investment Scheme. The individual limit is set to be increased from 5% to 10%, while the combined cap for all such investors is proposed to rise from 10% to 24%. This change would allow serious foreign individual investors to take more meaningful stakes in Indian companies, potentially improving price discovery, deepening shareholding, and supporting long-term capital formation."

Recently Nithin Kamath said in his LinkedIn post that SEBI recently made changes that have allowed us to significantly simplify Non-PIS NRI accounts: they now work like resident accounts, with fully online Aadhaar-based onboarding (when visiting India) and intraday, BTST, and F&O access with no need for a CP code.