Full Text
REGD. No. D. L.-33004/99
The Gazette of India
CG-DL-E-12062026-273406
EXTRAORDINARY
PART II-Section 3-Sub-section (ii)
PUBLISHED BY AUTHORITY
No. 2924]
NEW DELHI, FRIDAY, JUNE 12, 2026/JYAISTHA 22, 1948
4257 GI/2026
(1)
MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 12th June, 2026
S.O. 3030(E).— In exercise of the powers conferred by clauses (aa) and (ab) of sub-section (2) of section 46
of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government hereby makes the following
rules further to amend the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, namely:—
1. (1) These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Third Amendment)
Rules, 2026.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. 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;
3. 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 NON-
RESIDENT 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;"
(iv) in rule 13, -
(a) for the sub-heading “Transfer of equity instruments by NRI or OCI", the sub-heading “Transfer of
equity instruments by an individual person resident outside India including a NRI or an OCI" shall
be substituted;
(b) for the opening portion beginning with words “An NRI or an OCI holding equity instruments" and ending
with words "prescribed hereunder", the following shall be substituted, namely – “An individual person
resident outside India holding equity instruments of an Indian company or units in accordance with these
rules may transfer such equity instruments or units so held by him in compliance with the conditions, if any,
specified in the Schedules of these rules and subject to the terms and conditions provided hereunder:"
(c) for sub-rule(1), the following sub-rule shall be substituted, namely:-
"(1) An individual person resident outside India holding equity instruments of an Indian company or units on
repatriation basis may transfer the same by way of sale or gift to any person resident outside India:
Provided that prior Government approval shall be obtained for any transfer in case the company is engaged in
a sector which requires Government approval:
Provided further that the transfer made to 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 the beneficial owner of such investment is a citizen of any such country, shall require the prior approval
of the Government.
Explanation:- For the purposes of this rule,
(a) "ownership of an Indian Company" shall have the same meaning as defined 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;"
4. 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."
5. In the principal rules, in Schedule III, -
(i) 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;
(ii) in Schedule III, for paragraph (1), the following paragraph shall be substituted, namely:-
"(1) Purchase or sale of equity instruments of a listed Indian company
An individual person resident outside India may purchase or sell equity instruments of a listed Indian company on
repatriation basis, on a recognised stock exchange in India, subject to the following conditions, namely :-
(a) An individual person resident outside India may purchase and sell equity instruments through a branch designated
by an Authorized Dealer for the purpose;
(b) The total holding by any individual person resident outside India shall be less than ten per cent of the total paid-
up equity capital on a fully diluted basis or shall be less than ten per cent of the paid-up value of each series of
debentures or preference shares or share warrants issued by an Indian company and the total holdings of
all individual person resident outside India put together in the Indian company under this schedule shall not
exceed twenty four per cent of the total paid-up equity capital on a fully diluted basis or shall not exceed twenty
four per cent of the paid-up value of each series of debentures or preference shares or share warrants:
Provided that total holding of an individual person resident outside India in a listed Indian company under
schedule II, III or any other schedule of these rules, shall be less than the above prescribed individual limit of less than
ten per cent and in case of investment of ten per cent or more, the provisions of clause (c) of sub-paragraph (a) of
paragraph 1 of this schedule shall apply;
(c) Investment made by an individual person resident outside India under these rules in breach of the prescribed limit
of less than ten per cent shall be required to be divested within five trading days from the date of settlement of the
trades causing the breach. In case the individual person resident outside India chooses not to divest, then the entire
investment in the concerned company by such individual person resident outside India shall be considered as
foreign direct investment (FDI) and such individual person resident outside India shall not make further portfolio
investment in the company concerned. The individual person resident outside India, through the designated branch
of Authorized Dealer, shall bring the same to the notice of the depositories as well as the concerned company,
within seven trading days from the date of settlement of the trades causing the breach. The divestment of holdings
by the individual person resident outside India and the reclassification of foreign portfolio investment as FDI,
shall be subject to the same conditions as specified by Securities and Exchange Board of India and the Reserve
Bank for a foreign portfolio investor (FPI). The breach of the said aggregate or sectoral limit on account of such
acquisition for the period between the acquisition and sale or conversion to FDI within the prescribed time, shall
not be reckoned as a contravention under these rules."
[F. No. 1/11/2025-EM]
Dr. ALOK TIWARI, Jt. Secy.
Note: The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 were published in the Gazette of India,
Extraordinary, Part II, Section 3. Sub-section (ii) vide number S.O.3732 (E), dated the 17th October, 2019 and
subsequently amended vide the following notification numbers:
(i) S.O. 4355 (E), dated the 5th December 2019;
(ii) S.O. 1278 (E), dated the 22nd April, 2020;
(iii) S.O. 1374 (E), dated the 27th April, 2020;
(iv) S.O. 2442 (E), dated the 27th July, 2020;
(v) S.O. 4441 (E), dated the 8th December, 2020;
(vi) S.O. 3206 (E), dated the 9th August, 2021;
(vii) S.O. 3411 (E), dated the 19th August, 2021;
(viii) S.O. 4091 (E), dated the 5th October 2021;
(ix) S.O. 4242 (E), dated the 12th October 2021;
(x) S.O. 1802 (E), dated 12th April 2022;
(xi) S.O. 332 (E), dated 24th January 2024;
(xii) S.O. 1361 (E), dated 14th March 2024;
(xiii) S.O. 1722 (E), dated 16th April 2024;
(xiv) S.O. 3492 (E), dated 16th August 2024; and
(xv) S.O. 2549 (E), dated 11th June 2025
(xvi) S.O. 2174(E), dated 1st May 2026 and published on 2nd May 2026
(xvii) S.O. 2186(E) dated 2nd May 2026
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054. SARVESH KUMAR Digitally signed by SARVESH KUMAR
SRIVASTAVA
2026.06
Login to read full text