The planned revisions in Foreign Exchange Management (Non-Debt Instruments) Rules follow Finance Minister Nirmala Sitharaman’s announcement in the Union Budget 2026-27 to carry out a comprehensive review of the rules.
Foreign investment into India is presently governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (‘NDI Rules’).
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Pursuant to the announcement, the Centre constituted a committee to undertake a comprehensive review of the extant regulatory framework.
Based on the recommendations of the Committee, and in consultation with the central government and other stakeholders, the Reserve Bank of India (RBI) said it has prepared a draft of the rationalised rules.
One of the salient features of the proposed draft rules is a simplified and principle-based framework, the RBI said.It aims to rationalisation of provisions, harmonisation of definitions and a simplified regulatory architecture to enhance clarity and reduce regulatory complexity.
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Alignment with the FDI policy, enhanced ease of doing business, and a future-ready regulatory framework are other key features, the central bank said while inviting comments on the draft by August 31.
On issue and listing on an international stock exchange, the draft said a public company may issue its equity or offer equity of existing shareholders on a foreign stock exchange, subject to certain conditions.
One of the conditions is that the equity should be denominated in INR in the books of the company and held in dematerialised form.
“If such company is listed on a recognised stock exchange in India, then issue or offer of equity shall additionally be in compliance with the applicable SEBI regulations and such equity shall rank pari passu with equity listed on a recognised stock exchange in India,” it said.
In case, the company is not listed on a recognised stock exchange in India, then issue or offer of equity should be in compliance with the conditions or requirements prescribed by the Ministry of Corporate Affairs.
The draft also said that in case of initial listing of equity by a public company which is not listed on a recognised stock exchange in India, the price for issue or transfer of equity would be determined by a book-building process as permitted by the concerned international stock exchange.
The draft further said a person resident outside India or an foreign controlled entity (FCE) may make foreign investment on repatriation or non-repatriation basis, by way of subscription to an issue, purchase from any person or gift between natural persons.
It also said an NRI or an OCI may subscribe to the National Pension System governed and administered by Pension Fund Regulatory and Development Authority (PFRDA), provided such person is eligible to invest as per the provisions of the PFRDA Act..
The annuity/ accumulated saving will be repatriable, the draft said.
The central bank said the Rules will be finalised after wider public consultations.