Finance Minister Nirmala Sitharaman, in her Budget speech announced measures to boost equity market participation and capital inflows.
The government proposed raising the individual Persons Resident Outside India (PROI) investment limit in listed Indian companies to 10% from 5%.
The overall investment cap for all individual PROIs has been increased to 24% from 10%.
Finance Minister Nirmala Sitharaman on February 1 delivered the Budget speech for the financial year 2026-27 (FY27). During her speech, Sitharaman announced a push to broaden equity market participation and capital inflows.
She proposed to increase the Persons Resident Outside India (PROI) investment plans in listed indian companies. The individual PROI will now have an investment limit of 10% from the earlier 5%, with overall investment limit of all individual PROI increasing to 24% from the earlier 10%. PROIs can invest through the Portfolio Investment Scheme (PIS).
1 January 2026
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Commenting on this, Manoj Purohit of BDO India said that the amendment will open up the Indian capital markets for the PROI. "Indian non-residents understand the sentiment of the Indian capital markets and are keen to invest in them. This welcoming measure will not only increase inflows but also help stabilise the currency and capital markets,” he added.
In addition to equity markets, the government also announced measures to strengthen the corporate bond market. A dedicated market-making framework will be introduced to improve liquidity, supported by access to funds and derivative instruments linked to corporate bond indices.
To encourage the development of the municipal bond market, the government announced incentives for large urban local bodies. Cities issuing municipal bonds worth over ₹1,000 crore in a single issuance will be eligible for an incentive of ₹100 crore, building on the existing Amrit initiative. This move is expected to help cities raise funds for infrastructure while reducing dependence on budgetary support.
