FEMA Investment Rules Expanded

The Ministry of Finance has notified the Foreign Exchange Management (Non-Debt Instruments) (Third Amendment) Rules, 2026, significantly broadening the investment framework applicable to individual’s resident outside India. 

The amendments move beyond the earlier NRI- and OCI-specific regime and extend portfolio investment opportunities to all individual person’s resident outside India, subject to prescribed conditions. 

The notification also introduces safeguards relating to beneficial ownership, investments involving countries sharing land borders with India and reclassification of portfolio investments into foreign direct investment where prescribed thresholds are breached.