Quick Summary
The Ministry of Finance has notified the Foreign Exchange Management (Non-Debt Instruments) (Third Amendment) Rules, 2026. The amendments, published in the Official Gazette on June 12, 2026, introduce key changes to the investment framework governing individuals residing outside India. The revised
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FAQ :
The main change is that the rules now apply to all individual persons resident outside India, not just NRIs and OCIs, broadening eligibility for overseas investment.
Any individual person residing outside India can now purchase or sell equity instruments of listed Indian companies and other eligible securities on a repatriation basis, subject to specified conditions.
Yes, prior approval from the Central Government is mandatory if an investment leads to the transfer of ownership or control of a listed Indian company to entities or citizens of countries sharing a land border with India, or if the beneficial owner is from such a country.
Individual holdings must remain below 10% of the fully diluted paid-up equity capital, and aggregate holdings of all overseas individuals cannot exceed 24%.
Investments exceeding the prescribed limits must either be divested within five trading days or reclassified as Foreign Direct Investment (FDI), subject to regulatory requirements.
Yes, an individual person resident outside India can transfer equity instruments by sale or gift to another person residing outside India, though transfers requiring government approval or involving border-sharing countries still need clearance.
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