Person Resident Outside India (PROI) Permitted to Invest in Listed Companies via Portfolio Investment Scheme 

Union Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026-27 in Parliament on Saturday, announced higher equity investment limits. This was for persons resident outside India (PROIs) under the Portfolio Investment Scheme (PIS), aimed at improving liquidity and stability in Indian equity markets. 

Revised Investment Limits Under PIS 

The individual investment cap for PROIs has been increased from 5% to 10% of a listed Indian company’s paid-up equity capital as part of the budget recommendations. Additionally, the total cap for all of these investors has been raised from 10% to 24%. 

The International Exchange Management Act (FEMA) governs the current PIS framework, which is run by authorized dealer banks and licensed brokers, and these new regulations give international investors more opportunities to participate in Indian stocks. 

Budget Rationale and Market Impact 

Sitharaman introduced the policy, which aims to increase market depth and improve price discovery. According to the Budget speech, more foreign engagement is meant to offer liquidity and assist smooth out sharp price movements in publicly traded stocks.  

Market participants believe that the expanded restrictions will promote greater participation from long-term investors with economic or personal ties to India, particularly in large-cap and select mid-cap equities, where previous ceilings were reaching saturation.  

Regulatory Oversight and Compliance Framework 

The Portfolio Investment Scheme’s current reporting and compliance procedures will continue to monitor the updated restrictions. The securities market regulator will oversee the tracking of holdings to guarantee compliance with the aggregate and individual caps. 

Higher participation levels are supported while maintaining continuity for current investors through the unaltered tax treatment and operational procedures for PROI investments.  

Union Budget 2026 Focus 

The Union Budget 2026-27 was presented on February 1, 2026, by Finance Minister Nirmala Sitharaman in the Lok Sabha and the budget reaffirmed the government’s focus on bolstering India’s financial ecosystem. It also highlighted establishing the nation as a top destination for international capital, in addition to initiatives to expand local manufacturing and capital markets. 

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