Overview
- The Reserve Bank of India placed the draft Foreign Exchange Management (Foreign Investment) Rules, 2026 on its website and invited stakeholder comments by August 31, 2026, after work ordered in the 2026–27 budget.
- The draft draws a clear line between policy and operations by keeping sector caps and entry routes with the government and DPIIT while giving RBI responsibility for procedural FEMA rules such as payments, reporting and processes.
- It expands the list of eligible investees to include companies, LLPs, SEBI‑regulated vehicles (REITs, InvITs, AIFs, mutual funds, ETFs), partnership firms and proprietary concerns and consolidates permissible investment routes like subscriptions, purchases, pledges, depository receipts, NRI/OCI routes and international listings.
- On overseas listings the draft allows public companies to issue or offer equity on foreign exchanges provided the shares are INR‑denominated in the company’s books, held in dematerialised form, and comply with SEBI rules for India‑listed firms or relevant MCA requirements for unlisted firms; pricing follows SEBI norms for listed firms and arm’s‑length valuation for others.
- RBI says it prepared the draft after a government committee review and consultations, and it will finalise the rules after public feedback; if adopted, the changes could cut paperwork for foreign investors, widen investor pools and speed policy updates for companies seeking cross‑border capital.