NEW DELHI — The Reserve Bank of India and the Securities and Exchange Board of India (SEBI) announced a new framework that allows non‑resident Indians (NRIs) to invest in Indian equities and mutual funds through a Portfolio Management Scheme (PMS). The change, reported by The New Indian Express on 27 September 2026, removes several procedural hurdles that previously limited NRI participation in domestic markets.
How the New PMS Rules Work
The updated guidelines permit NRIs to open a PMS account with a registered asset‑management company (AMC) without the need for a separate demat account. Under the scheme, investors can place orders for listed securities, bonds, and exchange‑traded funds (ETFs) through a single platform. The RBI’s circular, issued on 25 September 2026, clarified that the PMS will be governed by the same regulatory framework that applies to resident investors, ensuring parity in compliance and reporting.
In practice, the new rules mean that NRIs can now manage a diversified portfolio of Indian securities from abroad, using a single electronic interface. The AMC will provide portfolio‑management services, including research, trade execution, and risk monitoring, while the investor retains full ownership of the underlying assets.
Implications for NRI Investors
Financial analysts say the move will broaden the investor base for Indian mutual funds and listed securities. The Economic Times highlighted that NRIs often seek diversified exposure to Indian markets but face high transaction costs and complex documentation. The new PMS framework is expected to reduce these costs by consolidating investment processes.
In addition, the IndianEagle article on 26 September 2026 noted that the global rollout of Aadhaar for NRIs and overseas citizens (OCIs) will streamline identity verification for PMS accounts. The integration of Aadhaar with the PMS registration process is expected to cut down on paperwork and speed up account activation.
Regulatory Safeguards
SEBI has reiterated that PMS accounts will be subject to the same disclosure and reporting obligations as other investment vehicles. Investors must submit annual statements and comply with foreign exchange regulations under the Foreign Exchange Management Act (FEMA). The RBI has also mandated that AMCs maintain a minimum net worth of ₹500 crore to qualify for managing NRI portfolios.
According to the RBI’s 2026 circular, the minimum investment threshold for NRIs in a PMS is ₹10 lakh, a reduction from the previous ₹50 lakh requirement. The change is aimed at encouraging smaller investors to participate in India’s capital markets.
Broader Market Impact
Market watchers predict that the new PMS rules will increase liquidity in Indian equities and mutual funds. The Economic Times reported that the average daily trading volume in Indian stocks has risen by 12% in the last quarter, partly due to increased foreign participation. The new PMS framework is expected to sustain this upward trend.
While the policy is designed to attract NRIs, it also aligns with India’s broader strategy to deepen its financial markets. The RBI’s 2026 annual report noted that foreign investment in Indian securities reached ₹1.2 trillion in the first half of the year, a 15% rise from the previous year.
Next Steps for NRIs
NRIs interested in using PMS should consult with a registered AMC and verify that the firm is authorized by SEBI to manage foreign portfolios. The RBI’s website provides a list of approved AMCs, and the new PMS guidelines require that investors complete a Know‑Your‑Customer (KYC) process that includes a biometric verification using Aadhaar.
For more details on the new PMS framework, NRIs can refer to the RBI’s circular dated 25 September 2026 and SEBI’s updated guidelines published on 26 September 2026.
