Budget 2026: NRI Investment Limit Doubled From 5% to 10%

Imagine you’re on a long journey building your global financial footprint. You’ve watched India’s growth story with admiration from abroad; its booming markets, resilient economy, and growing innovation ecosystem. But until recently, one barrier kept nagging at your investment plans: the limit on how much of an Indian company a Non-Resident Indian (NRI) could own.

For years, NRIs could invest directly in Indian equities, but each individual was capped at owning 5% of a company’s paid-up capital, while all NRIs combined could own 10%. These limits, set by existing foreign investment rules, meant deeper stakes and greater influence were hard to achieve without special approvals.

But things have now changed as on 1 February 2026, where in the Union Budget 2026-27 has taken a significant step to unlock more opportunities for NRIs trying to participate in India’s growth story. Finance Minister Nirmala Sitharaman announced a doubling of the investment cap for NRIs in Indian listed companies, a change poised to make Indian equities even more attractive to the global Indian diaspora.

Let’s break down with this blog what this means for you, your investments, strategies, and opportunities in Indian markets.

What Has Changed in Budget 2026?

On Budget Day, the government has set out a reform that directly impacts how NRIs can build equity positions:

Individual NRI investment limit has increased from 5% to 10%. This means a single NRI investor can now own a bigger slice of an Indian listed company than before, double the previous cap. 

The aggregate limit for all NRIs has also been raised from 10% to 24%. Together, these changes allow NRIs not only more room to grow their individual positions but also make collective ownership more significant in companies where diaspora confidence runs high.

This shift reflects a broader shift in policy thinking: India wants to make its capital markets more accessible, liquid, and globally competitive, inviting deeper participation from overseas Indians who want a share in its growth narrative.

Why Does This Matter for NRIs?

The implications of this policy change are far-reaching:

• More Ownership, More Influence: In many growing sectors like technology, healthcare, consumer goods, previously, the 5% cap limited an NRI’s ability to take meaningful positions. Now, with a 10% cap, investors can play a larger role in companies they believe in.
• Better Strategic Allocation: For NRIs who want to diversify beyond global markets into India’s equities, this opens the door to enhanced portfolio diversification backed by a growing economy.
• Confidence Signal to Markets: Raising the limit is also a policy signal. It says that India is willing to trust global Indian capital to contribute more significantly, making NRIs feel more welcome as investors in India Inc.
• Improve Market Depth and Liquidity: With more NRI participation possible, Indian markets might see deeper trading activity, better price discovery, and increased liquidity; benefits that all investors enjoy.

This reform is a win-win for markets and NRIs alike.

How Does This Fit Into the Larger Budget Picture?

While the investment limit change grabbed headlines for NRIs, it sits among a number of broader economic reforms unveiled in Budget 2026:

• Foreign exchange management reforms aimed at simplifying the way foreign investors operate in India.
• Continued focus on attracting foreign and diaspora capital to deepen capital markets.
• Ongoing reforms in other areas like taxation, standard deduction, and infrastructure spending that create a fertile macroeconomic backdrop for investments.

So, while the investment limit tweak is a standout, it’s part of a more comprehensive push to bolster Indian financial markets and integrate them more seamlessly with global capital.

What Should NRIs Do Next?

If you’re an NRI investor, here are practical next steps to make the most of this change:

• Review Your Portfolio Exposure: Now that higher stakes are allowed, assess which Indian stocks you want to increase exposure to, considering long-term fundamentals and sector growth prospects.
• Understand Regulatory Nuances: Though limits are higher, rules under RBI and SEBI still apply. Work with financial advisors or brokers familiar with NRI regulations to ensure compliance.
• Diversify Strategically: Use the increased cap to diversify holdings across sectors that resonate with your risk and return objectives, without overconcentrating in a single stock.
• Keep an Eye on Currency and Tax Rules: Remember, investment returns will be affected by currency movements and Indian tax regulations (like capital gains tax), which are separate considerations from the ownership limits.

The Big Picture: India’s Growth Story and Your Money

India’s economy is among the fastest-growing major markets globally, driven by internal demand, digital adoption, and youthful demographics. For NRIs, being part of this story; not just as observers but as significant shareholders is now more possible than ever before.

By doubling the investment limit, the government has reaffirmed its commitment to bring the global Indian investor closer to India’s financial markets. As these reforms take shape, informed and strategic NRI investors stand to benefit substantially.

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