The government will raise portfolio investment limits, allow individuals resident outside India to invest in equities and introduce a market-making framework for corporate bonds, Finance Minister Nirmala Sitharaman said in her Budget 2026 speech on Sunday.
The proposals also include a comprehensive review of the Foreign Exchange Management framework. Sitharaman said the government “will introduce a market-making framework to promote the corporate bond market,” as part of efforts to deepen participation in debt markets.
The measures mark a shift towards easing entry norms and ownership limits in India's financial markets, especially for overseas investors. By raising portfolio investment caps and widening eligibility, the government is signalling a push to broaden participation in equity and debt markets.
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She said the Foreign Exchange Management framework will undergo a comprehensive review. Individuals resident outside India will be permitted to invest in equities through the Portfolio Investment Scheme, Sitharaman said.
The proposed market-making framework is aimed at improving activity in the corporate bond market, while the review of the Foreign Exchange Management framework suggests a wider reset of rules governing cross-border capital flows. Taken together, the steps seek to remove constraints that limit investment access and liquidity in domestic markets.
The finance minister said the government will increase the portfolio investment limit for a single investor to 10% from 5%. The overall limit for all such investors will rise to 24% from the current 10%, she added.
Allowing individuals resident outside India to invest through the Portfolio Investment Scheme also aligns equity access with the proposed changes to investment limits, placing both equity and debt reforms within a single policy direction outlined in the Budget.
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