NRI Investment Rules Eased in Budget 2026-27 | UPSC GS-3 Economy

Context
Budget 2026-27 raises NRI investment limits in Indian equities while NRIs currently hold very little of NSE-listed shares.

Who are NRIs?
Indian citizens living abroad for more than 182 days, retaining Indian citizenship but residing outside India.

What is an FCNR Account?
Foreign Currency Non-Resident account
• Fixed-deposit account for NRIs.
• Held in foreign currency (USD, GBP, EUR etc.).
• Often gives higher stable returns than Indian equities, especially highlighted for NRIs.

Old RBI Limits for NRI Equity Investment
Under Portfolio Investment Scheme (PIS):
• 5% per NRI
• 10% aggregate for all NRIs in a company
• Investments above 10% → allowed up to 24% only with RBI approval.

New Rule (Union Budget 2026-27)
• Individual NRI limit doubled: 5% → 10%
• Aggregate NRI limit doubled: 10% → 24%
• No RBI approval needed → intended to improve ease of doing business.

NRI Investment Rules
NRI Investment Rules
PYQ – 2021, Ans – A
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