In the Union Budget 2026–27, Finance Minister Nirmala Sitharaman declared a relaxation of rules governing investments by persons of Indian origin (PIOs) classified as persons resident outside India (PROIs), allowing them to invest directly in India’s portfolio management services (PMS) instead of routing funds through the GIFT City.
As part of the changes, the individual investment limit for PROIs in PMS schemes has been raised to 10 per cent from the earlier 5 per cent, offering greater flexibility to overseas-based Indian investors seeking exposure to domestic capital markets.
The overall cap on investments by PROIs in a PMS scheme has also been increased sharply to 24 per cent from 10 per cent, giving portfolio managers significantly more headroom to accept capital from this investor category.
The government said the move is aimed at simplifying compliance requirements and lowering transaction costs, while potentially boosting foreign participation in India’s asset management industry. The impact, however, will depend on broader market conditions and global investor sentiment. |
