The reforms aim to reduce operational complexities, simplify market access, and expand the investor base for Indian equities and Government Securities.
Key Measures
Liberalisation of investment by individual Persons Resident Outside India (PROIs)
- PROIs permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS). (as announced in Union Budget FY2026-27)
- Earlier, only NRIs/OCIs were allowed to invest in PIS.
- Individual investment limit for a PROI in a company doubled from 5% to 10% (aggregate Limit raised to 24%).
Tax Exemption for Foreign Portfolio Investments (FPIs) Investing in G-Secs
- Income Tax on Interest and Capital Gain Tax waived on FPIs and investments by Bank for International Settlements in G-Secs.
Reforms in FPI Investment in Government Securities (G-Secs)
- Fully Accessible Route (FAR): expanded to include 15-, 30-, and 40-year tenor G-secs and Sovereign Green Bonds.
- FAR allows non-residents to invest in "specified securities" without any quantitative restrictions
- Removed three restrictions under General Route, viz. short-term investment limit, concentration limit and the security-wise limit.
Key Terms
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