RBI Doubles NRI and OCI Equity Investment Limit to 10% in Listed Indian Companies

On 5 June 2026, the Reserve Bank of India announced a significant liberalisation of the rules governing how Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) can invest in listed Indian companies. The headline change doubles the individual equity investment limit for an NRI or OCI in a single listed company from 5 percent to 10 percent of the company's paid-up capital, and raises the aggregate ceiling for all such investors taken together. The move, announced alongside the RBI Governor's monetary policy communication, is intended to deepen foreign participation in Indian equity markets while keeping the framework within the Foreign Exchange Management Act regime.

What the New Limits Actually Say

Under the Portfolio Investment Scheme route, an individual NRI or OCI could previously hold up to 5 percent of the paid-up value of shares of a listed Indian company without separate registration. That individual cap has now been doubled to 10 percent. The aggregate limit, which governs the combined holding of all NRIs and OCIs in a company, has been raised from 10 percent to 24 percent. As before, a company can permit the aggregate holding to reach the higher ceiling only if its general body passes a special resolution to that effect, preserving the company's control over the extent of non-resident shareholding.

The RBI also indicated that the relaxed limits would extend the benefit beyond NRIs and OCIs to a wider category of Persons Resident Outside India, broadening the pool of investors who can route equity investments through this channel. The operational changes are being given effect through amendments to the rules framed under the Foreign Exchange Management Act, which separate non-debt instruments such as equity from debt instruments.

Why the Change Matters for Investors and Companies

For individual non-resident investors, a higher personal ceiling means they can build larger positions in a favoured company without tripping regulatory thresholds that would otherwise require additional approvals. For listed companies, a higher aggregate ceiling can attract a deeper base of diaspora capital, though the requirement of a special resolution ensures that existing shareholders consciously decide how much non-resident ownership to allow. This is distinct from the debt side of the framework, which the RBI had separately consolidated earlier in the year when it streamlined the directions governing non-resident investment in bonds and other debt instruments.

The announcement landed in the same policy cycle in which the central bank addressed interest rates. Readers tracking the broader monetary picture can see our analysis of what the RBI's decision to hold the repo rate means for borrowers and the context from the June 2026 Monetary Policy Committee meeting.

How This Fits With Wider Market Reforms

The equity liberalisation is part of a sequence of capital-market changes in 2026 aimed at making Indian securities more accessible and better governed. The market regulator has separately tightened investor-protection rules, including new nomination requirements for mutual funds and demat accounts that investors must comply with. Non-resident investors who believe a bank or intermediary has mishandled their account or transaction can also escalate grievances through a complaint to the RBI Banking Ombudsman, which sets out time limits for resolution.

Investors should remember that the higher ceilings change what is permissible, not what is advisable. Concentration in a single stock carries its own risks, and the special-resolution requirement means the higher aggregate limit will apply only where a company has actively opted in. As always, currency movements, repatriation rules and tax treatment in both India and the country of residence will shape the real return on any investment.

Repatriation, Taxation and Practical Caution

Higher ceilings change what an investor may hold, but they do not change the surrounding compliance map. Investments under the Portfolio Investment Scheme must still be routed through a designated bank account, and repatriation of sale proceeds remains subject to the conditions of the Foreign Exchange Management framework. Capital gains are taxable in India, and depending on the investor's country of residence, may also attract tax abroad, subject to relief under the applicable double-taxation avoidance agreement. Investors should also note that the individual and aggregate ceilings are monitored on a near-real-time basis by depositories and custodians, and breaches can trigger mandatory divestment. The prudent course is to confirm the current limit available in a specific company before building a position, since the aggregate headroom depends on whether that company has passed the enabling special resolution.

Related Reading

For the regulatory backdrop on foreign money entering Indian banks, see Emirates NBD's acquisition of a 74 percent stake in RBL Bank, India's largest banking FDI.

On how securities regulation is evolving, see the Supreme Court's clarification of SEBI's legal standard for proving securities fraud.

Key Takeaways

The individual NRI and OCI equity limit in a listed Indian company rises from 5 percent to 10 percent, and the aggregate ceiling rises from 10 percent to 24 percent, with the higher aggregate available only where the company passes a special resolution. The relaxation, announced on 5 June 2026 and given effect through amendments to the rules under the Foreign Exchange Management Act, widens the door for diaspora and other non-resident capital in Indian equities while leaving control over the extent of non-resident ownership with each company.