India Opens Doors Wider for Global Investors with Sweeping Reforms

The Indian government has announced a range of reforms to entice foreign investments by simplifying investment rules and offering tax benefits. Individuals from outside India can now invest in listed Indian companies' equity. Major changes aim to attract stable long-term foreign capital and widen global investor participation in Indian markets.

In a significant move, the Indian government unveiled a raft of reforms on Friday, designed to enhance the nation's appeal to foreign investors by loosening investment regulations for individuals residing overseas and foreign portfolio investors (FPIs). A notable aspect of these reforms is the introduction of tax benefits for investments in government securities.

For the first time, Persons Resident Outside India (PROIs) are permitted to invest in equity instruments of listed Indian companies through the Portfolio Investment Scheme (PIS), a privilege previously reserved for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs). This development comes as part of the government's broader strategy to solidify India's status as a prime global investment hub.

The Ministry of Finance emphasized these adjustments aim to deepen capital markets and attract long-term foreign capital flows. From April 1, 2026, foreign portfolio investments in government securities will be exempted from income tax on interest or capital gains, and the investment cap for individual PROIs will double from 5% to 10% per company. Additionally, changes in the framework are set to encourage greater global participation in these markets.