On 5 June 2026, the Reserve Bank of India made a quiet announcement that changes the investment landscape for every NRI, OCI and overseas investor holding – or wanting to hold – Indian equities.
The individual investment limit under the Portfolio Investment Scheme has been doubled. The aggregate ceiling has more than doubled and for the first time, the same simplified investment route has been extended to all individual Persons Resident Outside India – not just NRIs and OCIs.
The move builds on changes announced in Budget 2026, under which the individual investment ceiling for NRIs in a listed company was doubled to 10% from 5%, and the aggregate investment limit was increased to 24%. The RBI’s June 5 circular is the regulatory confirmation that makes it law.
What the Old Rules Said
Under the previous framework, an individual NRI or OCI cardholder could hold up to 5% of the paid-up equity capital of any single listed Indian company through the Portfolio Investment Scheme route and do so without registering as a Foreign Portfolio Investor with SEBI. The combined holding of all NRIs and OCIs in a single company was capped at 10%. To exceed either limit, investors had to navigate the more complex and compliance-intensive FPI registration process.
Earlier, overseas investors mainly NRIs and OCIs needed SEBI registration to own more than the standard RBI limit of 5% of the equity of a listed Indian company. Any exposure to Indian equities beyond the stipulated 5% required them to tread the more complex Foreign Portfolio Investor route.
For most NRI investors, the 5% individual limit was not a constraint they ever approached. However, for NRIs with concentrated positions in specific companies – family businesses, sector specialists, or investors with high conviction in a single stock- the limit was a real ceiling with a complex, expensive solution above it.
What Has Changed: Three Things Simultaneously
The new rules change three things simultaneously.
Change 1: Individual Limit Doubled – 5% to 10%
The individual investment limit for an NRI or OCI cardholder in listed Indian companies has been doubled from 5% to 10% without needing SEBI registration.
An NRI who previously held the maximum 5% in a listed company can now build their position to 10% – still through the straightforward PIS route, without triggering FPI registration requirements.
Change 2: Aggregate Ceiling More Than Doubled – 10% to 24%
The aggregate ceiling for all overseas individual investors combined in a single company has been raised from 10% to 24%.
This is the change with the largest market-wide impact. Previously, once all NRI and OCI investors collectively held 10% of a company, no further NRI investment was possible without board and shareholder approval to enhance the limit. That ceiling is now 24% – creating dramatically more headroom for NRI participation in Indian equities across the board.
Change 3: Extended to All Individual PROIs – including Foreign Nationals
RBI has expanded the scope of eligible investors under the revised framework. The relaxed investment norms will benefit not only NRIs and OCI cardholders but also individual Persons Resident Outside India (PROIs), including foreign nationals. RBI’s inclusion of foreign nationals broadens access to India’s stock markets and opens the door to an influx of overseas investment.
The RBI said the same registration-free facility will now be extended to all individual Persons Resident Outside India, bringing them on par with NRIs and OCIs.
This is a significant broadening of the investor universe – not just a limit increase for existing participants.
What This Means for Different Types of NRI Investors
The Concentrated Investor
If you have long held a significant stake in a family company, a sector you know well, or a stock with high conviction and previously found yourself at or near the 5% ceiling – you now have double the headroom without needing to navigate FPI registration. The path from 5% to 10% is now as straightforward as your original investment.
The Diaspora Investor Building an India Portfolio
For NRIs who allocate a portion of their global portfolio to Indian equities as part of a long-term India growth thesis, the increased individual limit and expanded aggregate ceiling mean there is substantially more room to build positions in mid-cap and small-cap companies where NRI aggregate ownership previously reached ceilings faster.
The Foreign National Previously Locked Out
The inclusion of foreign nationals among eligible PROIs is a landmark change. A British, American or Singaporean citizen with no Indian origin who wants to participate in India’s equity markets can now do so through the simplified PIS route – without SEBI FPI registration – up to the same 10% individual limit available to NRIs.
The NRI Already at the Old 5% Limit
If you currently hold 5% of a listed company’s equity and have been prevented from increasing your position, the regulatory barrier is now removed. Review your demat account and discuss with your broker and designated bank whether your existing PIS permissions need to be updated to reflect the new limits.
Five Things NRIs Must Do Right Now
- Verify Your Existing PIS Account Status : If you have a PIS-enabled NRE account and demat account already, confirm with your designated bank that your account framework is up to date and reflects the new limits. Some banks may require updated documentation or permission letters.
- Assess Your Current Holdings Against the New Limits : If you have held back from increasing positions due to the old 5% ceiling, run a review of your Indian equity portfolio. Identify companies where you had conviction but limited investment. The new 10% limit may change your allocation strategy.
- Check Whether the Company’s Aggregate Limit Is Already at 24% : The new aggregate ceiling of 24% applies across all NRI and overseas individual investors in a company. If a company was already near the old 10% aggregate ceiling, it may now have significant headroom. Check with your broker before assuming free access.
- Decide: NRE PIS or NRO Non-PIS : If you want full repatriation flexibility on your equity proceeds, use the NRE PIS route. If you are comfortable with the USD 1 million annual repatriation limit, the NRO non-PIS route offers simpler compliance. The choice should be made before building a significant position – changing routes mid-investment is operationally complex.
- Ensure Your ITR and PAN are in Order : An NRI demat account requires PAN card and complete KYC documentation. NRIs with inoperative PAN cards due to non-linking face TDS at higher rates on equity sale proceeds. Verify your PAN is operative and your ITR filing is current before initiating new investments.
How FinPracto Helps NRI Investors Navigate the New Framework
At FinPracto, we work with NRI investors across the USA, UK, Canada, UAE, Singapore and Australia who are building Indian equity portfolios and need both investment access and compliance certainty.
Our services for NRI equity investors include:
- NRE vs NRO Route Analysis – Assessing repatriation flexibility vs compliance simplicity for your specific investment size and horizon
- Capital Gains Tax Planning – Computing STCG and LTCG liability on Indian equity positions, advance tax planning, and ITR-2 filing to claim TDS refunds
- FEMA Compliance Review – Ensuring your existing equity holding structure, PIS accounts and repatriation arrangements are compliant with current FEMA and RBI regulations
- ITR Filing for NRI Investors – Complete return filing including Schedule FA disclosure of Indian equity holdings, capital gains computation and TDS credit claims
- Repatriation Planning – Structuring sale proceeds repatriation efficiently through NRE or NRO routes with correct Form 145/146 documentation where required
Final Thought
The RBI’s 5 June 2026 announcement is not a technical adjustment. It is a structural shift in how India views its diaspora as an investor class.
By doubling individual limits, more than doubling aggregate ceilings and extending the simplified PIS framework to all overseas individual investors – without requiring SEBI registration – India has made it meaningfully easier for its diaspora to participate in its growth story.
The increase in investment limits for NRIs and OCIs should be viewed as part of a larger capital mobilisation strategy rather than a standalone market access measure.
For NRIs who have long wanted to build larger positions in Indian companies they believe in but were constrained by the old framework – the constraint has been removed.
The opportunity is real. The compliance framework still requires careful navigation. And the time to understand both is now – before the positions you want are taken by those who moved faster.
