In a significant move announced during the Union Budget 2026, Finance Minister Nirmala Sitharaman has unveiled a new policy that allows Non-Resident Indians (NRIs) to invest directly in Indian equities. According to the budget provisions, NRIs can now invest up to 10% of their portfolio directly in Indian stocks, marking a pivotal shift in investment regulations for the diaspora.
Key Changes Explained
The decision to permit NRIs to invest up to 10% directly in Indian equities is aimed at simplifying the investment process and enhancing market accessibility. Previously, NRIs often faced hurdles in directly participating in the Indian stock market, relying on indirect routes or complex structures. This change is expected to streamline investments and encourage greater financial inclusion among the global Indian community.
Addressing Practical Issues for Small Taxpayers
Finance Minister Sitharaman highlighted that this move is designed to address practical challenges faced by small taxpayers, including students, young professionals, tech employees, and relocated NRIs. By allowing direct equity investments, the government aims to reduce bureaucratic barriers and provide a more straightforward pathway for these groups to engage with India's growing economy.
Impact on the Indian Stock Market
The introduction of this policy is likely to boost liquidity and investor participation in the Indian stock market. With NRIs gaining direct access, there could be an influx of capital, potentially driving market growth and stability. This aligns with broader economic goals of attracting foreign investment and strengthening India's financial ecosystem.
Broader Implications
This change in the Union Budget 2026 reflects the government's commitment to modernizing financial regulations and supporting the diaspora. It is part of a series of measures aimed at fostering economic growth and ensuring that India remains an attractive destination for global investors. The move is also expected to enhance transparency and ease of doing business for NRIs looking to invest in their home country.
Overall, the Union Budget 2026's provision for NRIs to invest up to 10% directly in Indian equities represents a forward-thinking step that could reshape investment patterns and contribute to India's economic resilience in the coming years.
