Principal rules were published vide S.O. 3732(E) dated October 17, 2019 and last amended vide S.O. 2186(E) dated May 2, 2026. In exercise of powers under Section 46(2)(aa) and (ab) of the Foreign Exchange Management Act, 1999, the following amendments are made:

Rule 9(1): The words “a non-resident Indian or an overseas citizen of India” are substituted with “an individual.”

Chapter V Heading and Rules 12 and 13: All references to “NRI or OCI” are substituted with “an individual person resident outside India including a NRI or an OCI.” Rule 12(1) is substituted to provide that an individual person resident outside India may, on repatriation basis, purchase or sell equity instruments of a listed Indian company as specified in Schedule III. Rule 13(1) is substituted to provide that an individual person resident outside India holding equity instruments on repatriation basis may transfer the same by sale or gift to any person resident outside India. In both rules, investment or transfer resulting in ownership or control of a listed Indian company passing to entities or citizens of a country sharing land border with India, or where the beneficial owner is a citizen of such country, shall require prior Government approval.

Schedule II, Para 1(a)(i): The proviso is substituted to provide that total holding of a foreign portfolio investor under Schedule II, III or any other schedule, including through an investor group, in a listed Indian company shall be less than the prescribed individual limit; for investment of ten percent or more, the provisions of clause (iii) of sub-paragraph (a) of paragraph 1 shall apply.

Schedule III, Para (1): The heading is amended to include “an individual person resident outside India including” before NRI/OCI. Para (1) is substituted to provide that an individual person resident outside India may purchase or sell equity instruments of a listed Indian company on repatriation basis on a recognised stock exchange, subject to: total individual holding to be less than ten percent of total paid-up equity capital on fully diluted basis; aggregate holdings of all individual persons resident outside India not to exceed twenty-four percent. Investment in breach of the ten percent limit shall be divested within five trading days; if not divested, the entire investment shall be treated as FDI and no further portfolio investment shall be made in the concerned company. Intimation to depositories and the company shall be made within seven trading days through the designated Authorised Dealer branch. Reclassification as FDI shall be subject to SEBI and Reserve Bank conditions. Breach of limits during the acquisition-to-divestment or FDI conversion period within prescribed time shall not be treated as a contravention.