The Ministry of Finance (MoF) on June 12, 2026, issued the Foreign Exchange Management (Non-debt Instruments) (Third Amendment) Rules, 2026 to further amend the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
The following amendments have been stated:
• In the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (hereinafter referred to as the principal rules) in rule 9, in sub-rule (1), for the words “a non-resident Indian or an overseas citizen of India”, the words “an individual” shall be substituted;
• In the principal rules, in chapter V, -
(i) for the heading “INVESTMENT BY NON-RESIDENT INDIAN OR AN OVERSEAS CITIZEN OF INDIA”, the following heading shall be substituted, namely – INVESTMENT BY AN INDIVIDUAL PERSON RESIDENT OUTSIDE INDIA INCLUDING A NONRESIDENT INDIAN OR AN OVERSEAS CITIZEN OF INDIA
(ii) in rule 12, for the sub-heading “Investment by NRI or OCI - A NRI or an OCI may make investments as under:- ”, the sub-heading “An individual person resident outside India including a NRI or an OCI may make investments as under:-” shall be substituted.
(iii) in rule 12, for sub-rule (1), the following sub-rule shall be substituted, namely:-
“(1) An individual person resident outside India may, on repatriation basis, purchase or sell equity instruments of a listed Indian company and other securities in the manner and subject to the terms and conditions as specified in Schedule III: Provided that investment by an individual person resident outside India which results in transfer of ownership or control of the listed Indian company to entities or citizens of a country which shares land border with India or where beneficial owner of such investment is a citizen of any such country, shall require the prior approval of the Government.;
Explanation: - For the purpose of this rule,-
(a) “ownership of an Indian Company” shall have the same meaning as referred under rule 23 of these rules;
(b) “beneficial owner” shall have the same meaning as assigned to it in clause (fa) of sub-section (1) of section 2 of the Prevention of Money-laundering Act, 2002 (15 of 2003), and shall be determined as per the criteria specified under sub-rule (3) of rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, made under the said Act; ”
• In the principal rules, in Schedule II, in paragraph (1), in sub-para (a) in clause (i), for the proviso, the following proviso shall be substituted, namely: -
“Provided that total holding of a foreign portfolio investor under schedule II, III or any other schedule of these rules, including through an investor group under this schedule, in a listed Indian company, shall be less than the above prescribed individual limit and in case of investment of ten per cent or more, the provisions of clause(iii) of sub-paragraph (a) of paragraph 1 of this schedule shall apply.
Explanation: For the purposes of this schedule, the expression “investor group” shall have the same meaning as assigned to it under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, as amended from time to time.”
• In the principal rules, in Schedule III, in the heading, for the words “Non-Resident Indian (NRI) or Overseas Citizen of India (OCI)”, the words “an individual person resident outside India including a Non-Resident Indian (NRI) or Overseas Citizen of India (OCI) shall be substituted.
They shall come into force on June 12, 2026.
[Notification No. S.O. 3030(E)]
