The Ministry of Finance and Reserve Bank of India (RBI) have released amendments to foreign exchange management regulations on non-debt instruments, which replaces the terms non-resident Indian (NRI) or an overseas citizen of India (OCI
The RBI’s also change how payments and reporting are required to be completed for such investments.
The finance ministry brought into effect the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2026 on 12 June 2026. The rules also outline details of the purchase/sale of equity instruments of India-listed companies, including individual and aggregate caps, by individuals residing outside the country.
Any deviations from these caps need to be divested within five trading days. When investors fail to do so, their investment shall be considered a foreign direct investment and they will not be allowed to make any further portfolio investments in the company.
When the investment leads to ownership, controlling share or beneficial ownership to a citizen of a neighbouring country, it requires government approval.
Any cap breaches and required divestments must also be reported by the non-resident individual to the company and depositories through its designated branch of authorised dealer. This must be completed within seven trading days of the breach.
