Individuals residing abroad now have the opportunity to invest in Indian stocks through the Portfolio Investment Scheme (PIS). This was announced by Finance Minister Nirmala Sitharaman during her presentation of the Union Budget 2026. This marks her ninth consecutive budget speech under the leadership of Prime Minister Narendra Modi.
Context of the Announcement
This announcement comes at a crucial time for the Indian stock markets. In 2025, foreign investors withdrew approximately ₹19 billion, followed by another ₹4 billion in January 2026. Economic factors such as currency fluctuations and lower post-tax returns have made Indian investments less appealing compared to safer options available overseas.
Expert Insights
Nimesh Chandan, Chief Investment Officer at Bajaj Finserv Asset Management Limited, emphasized the importance of the upcoming budget. He highlighted the need for the Finance Minister to take steps that will attract both Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) into the Indian economy.
Details of the Portfolio Investment Scheme
The Portfolio Investment Scheme facilitates investment by non-resident Indians (NRIs) and foreign investors in Indian stocks through designated bank accounts approved by the Reserve Bank of India (RBI). Key features of the scheme include:
- Individual investment limit set at 5%.
- Company-wide investment cap at 10%.
- All transactions must comply with regulatory guidelines.
- Repatriation of invested funds is allowed.
Additional Measures for Non-Resident Investment
Alongside the PIS announcement, several other important measures were introduced in Budget 2026:
- The individual investment limit for Persons Resident Outside India (PROIs) has been increased from 5% to 10%.
- The overall investment ceiling for all PROIs has been raised from 10% to 24%.
- Residents living abroad are now permitted to invest in Indian equities via a portfolio route.
- A proposed ₹5,000 crore allocation for the City Economic Regions scheme.
- A review of Foreign Exchange Management Act (FEMA) regulations concerning non-debt instruments.
These initiatives indicate a focused effort to enhance foreign investment in India, paving the way for a more integrated global investment environment.
