Portfolio Investment Scheme (PIS) 2026: New Rules for Foreign Individual Investors in India.

Until earlier this year, the Portfolio Investment Scheme (PIS) was not available to foreign individuals without Indian origin, limiting their ability to invest directly in listed Indian companies through the PIS route.

The Portfolio Investment Scheme (PIS) was reserved for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs). Anyone else wanting exposure to Indian equities had to register as a Foreign Portfolio Investor or invest through a corporate vehicle, both heavier undertakings for an individual simply looking to invest.

That has now changed. In June 2026, the government notified the Foreign Exchange Management (Non-Debt Instruments) (Third Amendment) Rules, 2026, opening the PIS route to every ‘person resident outside India’ (PROI), not just those with Indian origin. It is one part of a wider set of measures introduced this year aimed at bringing stability to the rupee, but for individual investors abroad, this particular change is the one worth understanding.

Who Can Invest Under the Revised PIS Rules?

The core change is eligibility. Where PIS was once available only to NRIs and OCIs, any individual PROI can now invest in listed shares and securities of Indian companies through the same route. A Singaporean investor with no ties to India can now step into Indian equity markets just as an NRI or OCI already could without first becoming a registered Foreign Portfolio Investor or routing the investment through a company.

How much are the Revised PIS Investment Limits?

Limits have moved as well, in the investor’s favour. An individual PROI could previously hold up to 5% of the paid-up equity capital of a listed company; that ceiling now stands at 10%.

Taken together, all individual PROIs investing in a single company can now collectively hold up to 24% of it, up from the earlier 10% aggregate limit.

What are the Safeguards and Compliance Conditions that Apply?

Liberalisation of this kind is rarely unconditional, and this is no exception. If an individual PROI’s holding in a company crosses the 10% threshold, the excess must be divested within five trading days of settlement. Miss that window, and the entire investment is reclassified as Foreign Direct Investment (FDI), which brings with it FDI’s sectoral caps, entry-route conditions and reporting requirements, a materially different compliance position from a portfolio investment.

Separately, where an investment by an individual PROI would result in a transfer of ownership or control of a listed company to an entity or citizen of a country sharing a land border with India, prior government approval is required before the investment can proceed. This is consistent with the existing approval requirement under India’s foreign investment framework for investments involving entities or citizens of countries sharing a land border with India.

What does this Mean for Foreign Investors?

For NRIs and OCIs already investing under PIS, nothing changes procedurally, the same route continues, just with a higher individual ceiling. No fresh registration or approval is needed to benefit from the increased limit.

For other foreign individuals investing for the first time, this is a genuinely new door - direct access to Indian listed equity without an FPI registration or a corporate structure. The operational basics still apply i.e. a Non-Resident External or Non-Resident Ordinary rupee account, a demat account, and reporting through the designated Authorised Dealer bank, but the eligibility barrier itself is gone.

For anyone investing from, or connected to, a country sharing a land border with India, the approval condition is worth factoring in before committing funds, since it affects timing and, in some cases, whether the investment can proceed as planned. Need professional assistance with PIS and FEMA compliance? Connect with us at enquire@kdpaccountants.com. At KDP Accountants, we help foreign investors understand the applicable FEMA requirements and investment framework.

Frequently asked questions

Do I need to register as a Foreign Portfolio Investor to invest under PIS?

No. PIS and the FPI route are separate. An individual PROI can invest directly under PIS without FPI registration.

What happens if my holding accidentally crosses the 10% limit?

You have five trading days from settlement to divest the excess. If that window passes, the entire investment, not just the excess is treated as FDI, and FDI’s conditions apply.

Does this apply to unlisted Indian companies as well?

No. PIS, and this relaxation, applies only to listed Indian companies. Investment in unlisted companies continues to be governed separately, generally under the FDI route.

Is prior government approval needed for every investment under the new rules?

No. Approval is required only in the specific case where the investment would transfer ownership or control of a listed company to an entity or citizen of a country sharing a land border with India. Other investments proceed under the standard PIS route.

Can a foreign individual invest in Indian listed shares without becoming an FPI?

Yes, a foreign individual can invest in Indian listed shares without becoming a Foreign Portfolio Investor (FPI).

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Gayatri is a CA Final student currently pursuing her articleship, who is particularly interested in cross-border financial transactions and FEMA regulations. She has been exposed to issues concerning foreign investments, Overseas Direct Investment (ODI), External Commercial Borrowings (ECB), and regulatory reporting under the Reserve Bank of India (RBI) framework through her hands-on experience during her articleship.

In order to effectively contribute to the ever-changing landscape of cross-border investments, she is eager to gain deeper expertise in FEMA compliance, foreign investment regulations, and international financial advisory.